A small tuck-in acquisition today from Superloop (added 11,000...

A small tuck-in acquisition today from Superloop (added 11,000 new customers)

Bigblu Broadband plc (AIM: BBB), a leading provider of alternative fast broadband services, announces that it has sold the fibre broadband customer base, along with relevant infrastructure, of its Australian subsidiary SkyMesh Pty Ltd to Australian provider of connectivity services Superloop Ltd (ASX: SLC) ("Superloop") for AUD $1.5m in cash.

The disposal relates to around 11,000 fibre customers serviced under the NBNCo broadband access network. Customers on SkyMesh's satellite and fixed wireless broadband services will be unaffected by the transaction. BBB inherited the fibre customer base when it acquired SkyMesh's satellite and fixed wireless operations in 2016. As expected, due to the competitive nature of this sector, these fibre customers contributed minimal EBITDA to the Group with a profit margin contribution significantly below BBB's average. Given the lack of synergies with the rest of its products, the Company does not view these fibre customers as core to its growth strategy and, as such, believes they will be better served by Superloop. The proceeds from the disposal will be used to fund exceptional and reorganisation costs within Australia as the business is optimised to generate higher returns. In addition, the proceeds will be used to reduce the Company's senior debt with HSBC or fund future accretive bolt-on acquisitions with customer bases focused on core satellite or fixed wireless.

Andrew Walwyn, CEO of Bigblu commented: "Bigblu's focus is on serving customers outside the fibre footprint via a variety of alternative broadband offerings including satellite, fixed wireless, 4G and 5G and we feel that that the structure of the fibre broadband market under the NBNCo scheme does not suit our focused alternative broadband business model. "Bigblu is clearly focused on its core markets of delivering a high quality alternative broadband service to the last 5% to 10% of customers in each territory that aren't serviced by fibre. "We're very grateful to these fibre customers for their support whilst they've been part of the Bigblu family and we're confident they will be very well looked after in the future by Superloop who are real specialists in delivering fibre services."

Bevan Slattery CEO of Superloop commented: "We are excited with this transaction and looking forward to migrating these clients onto the Superloop network later this year to deliver an exceptional user experience. Importantly we also look forward to continuing our long working relationship with Bigblu Broadband and Skymesh."