Aussie Broadband in A$273M tilt at Symbio

Australian cloud communications provider Symbio now has a new suitor – local telco Aussie Broadband.

The full service provider based in rural Victoria has offered a combination of cash and stock for Symbio, valuing the company at A$3.15 per share, a 10.5% premium on the revised offer made by rival Superloop two weeks ago.

Aussie Broadband's bid of A$2.36 in cash and 0.192 shares for each Symbio share implies a total valuation of Symbio at 273 million Australian dollars (US$172 million).

Symbio said in a filing after trading closed on Friday that it would recommend the Aussie Broadband offer in the absence of a higher proposal.

It said it had terminated discussions with Superloop and had entered into a three-week period of exclusivity with Aussie Broadband.

Superloop, another small full-service telco, made its first cash and scrip offer of A$2.85 in early August, a 19.7% premium to Symbio's trading price that valued the company at A$243 million ($156 million).

It raised that offer to A$248 million ($160 million) on September 22, declaring it was its "best and final" offer in the absence of a higher bid. The company confirmed Monday it had terminated its bid.

Symbio's stock closed at A$3.03 today, up 14.8%. Aussie Broadband fell 0.73%.

Growth prospects

The race to acquire Symbio is driven by the competition among challenger telcos in the Australian market as well as a positive view on Symbio's prospects in enterprise comms.

Symbio, which describes itself as a cloud-based unified communications and voice provider, says it has a 10% share of Australia's fixed-line numbers and last year carried 10 billion minutes in voice calls. It has three segments – CPaaS (communications platform as a service), TaaS (telco as a service) and UcaaS (unified communications as a service).

In the 2022/23 financial year it reported underlying EBITDA of A$27.7 million ($17.8 million) on sales of A$210.8 million ($135.7 million) with a 47% gross margin. It is now expanding offshore, with services running in Malaysia, Singapore and New Zealand. 

Aussie Broadband has 8% of the NBN broadband market, with 523,000 residential subs. It posted EBITDA of A$89.6 million ($57.7 million) on sales of A$788 million ($507 million), up 23% year-on-year, for full-year 2022/23, with enterprise services accounting for 22% of revenue.

Superloop's exit from the play for Symbio ends a successful run of deal-making over the past two years.

Last year, it acquired MyRepublic Australia's broadband subscribers for A$12.5 million ($8 million), FTTP and smart Wi-Fi player VostroNet for A$35 million ($22.5 million), and white label firm Acurus for A$15 million ($9.6 million). In 2021 it acquired ISP Exetel ISP for A$110 million ($70.8 million) and also gained A$125 million ($80.4 million) cash after selling most of its Hong Kong and Singapore assets.