5G Networks has agreed to merge with domain hosting company Webcentral Group, of which Webcentral will acquire 100 percent of 5GN shares.
The move concludes nearly 12 months of acquisition speculation. Under the arrangement, 5GN shareholders are set to receive two Webcentral ordinary shares for each 5GN share held.
On the revenue side, WCG said the merged group will allow for an acceleration of cross-sell and up-sell opportunities to complementary customer bases across a larger addressable market.
WCG brings an existing customer base of more than 330,000 business clients, which will provide 5GN with more streamlined access to drive sales of its data network and cloud services platform.
In addition, the group expects to generate cost synergies of more than $2 million from consolidating its operating platform and cutting staff costs.
Those costs savings together with increased revenue upside is expected to flow through to a positive uplift in EBITDA of more than 20 percent, WCG said.
The companies believe the merger will diversify the business within its wider corporate strategy to become an ASX300 listed company.
