Swoop divests wholesale voice business for $9M

Swoop will divest its wholesale voice business Voicehub to Gold Coast-based telecommunications provider Pivotel for $9 million.

The arrangement is an all-cash deal and represents 5.2 and 4.5 times of its normalised earnings before interest, tax, depreciation and amortisation (EBITDA) from its 2023 and 2024 financial years, respectively.

Voicehub was previously acquired by Swoop in October 2021 for $6 million.

Proceeds from the sale will go towards Swoop’s core residential, small- to medium-sized business (SMB), data and voice businesses.

“Whilst we have seen some growth since the original acquisition of Voicehub, we have made the decision to divest this wholesale part of our organisation in order to focus on our key markets and customers,” said Swoop CEO Alex West.

“The $9 million proceeds of this transaction will provide additional balance sheet flexibility as well as being used to fund growth in our residential infrastructure, mobile and NBN sales engine and provide a stronger operating cash position in the underlying business for FY25.

“We are pleased this process has reached a successful outcome; and that our customers and Voicehub staff will find a good home with the Pivotel team. This sets the business up well for FY25 and provides additional firepower for continued organic growth in the year ahead.”

Additionally Swoop has entered into a long-term contract with Pivotel to make sure the new operators “maintain the competitive wholesale rates and cost structure”.

Bonitz Advisory is acting as Swoop’s merger and acquisition adviser on the deal, Maddocks is acting as legal adviser and PKF is acting as tax adviser.