Superloop, an Australia-based fiber infrastructure provider, today announced it has entered into a binding agreement to acquire Exetel Pty Ltd, Australia’s largest independent internet service provider (ISP) for A$110m ($85.2m USD) from the Linton family. Specifically, transaction consideration paid for Exetel is in the form of A$100m ($77.5m USD) in cash and A$10m ($7.7m USD) in Superloop shares. Notably, Exetel generates 45% of its revenue from NBN (National Broadband Network) connectivity services.
Superloop is valuing Exetel at an implied FY21 EV/EBITDA multiple of 10.0x (pre-synergies) and 6.9x (post-synergies), on a FY21 pro forma basis. Finally, the acquisition is expected to close in late July 2021.
Exetel – Overview
Exetel is Australia’s largest independent internet service provider (ISP) with 110k+ residential and business customers. Overall, the company provides 185k+ active internet, telephone (VoIP & mobile), and communications services to its customers.
Exetel’s revenue primarily derives from connectivity services including NBN (National Broadband Network), fiber broadband, mobile, and business telco services. Below is a breakdown of Exetel’s revenue by service and product:

Financial Profile
For the twelve months to June 30, 2021, Exetel forecasts that it will generate overall revenue of A$150m and EBITDA of A$11m.
Operational Benefits – Superloop and Exetel
Superloop’s acquisition of Exetel centers on increasing the utilization of Superloop’s digital infrastructure assets in Australia.
Digital Infrastructure – Superloop
Superloop owns 648 route miles (1,043 route kilometers) of terrestrial dark fiber networks in Sydney, Melbourne, Brisbane, Canberra, Singapore, and Hong Kong.

Additionally, Superloop is a member of the INDIGO subsea cable consortium, which spans 5.7k miles (9.2k kilometers).
Synergistic Benefit
Superloop, through the acquisition of Exetel, will onboard the company’s 110k+ consumer and business customers, providing it with enhanced scale. In turn, Superloop will realize synergies by moving portions of Exetel’s internet service provider (ISP) traffic onto its own fiber network infrastructure.
Specifically, two key sources of traffic where Superloop can reap synergies, will be from Exetel’s IP backbone and NBN (National Broadband Network) backhaul networks. As a result, the combined Superloop and Exetel will pay less to the NBN and third-party carriers for transmitting its customer’s data traffic.
Financial Profile – Superloop and Exetel
The combination with Exetel will enhance Superloop’s financial scale and market relevance, with 155k+ customers supported by infrastructure economics.
Overall, the combined business will generate A$261m in revenue and A$34m of EBITDA (post-synergies). Notably, Superloop is targeting network cost synergies of ~A$5m per annum, related to the increased utilization of its fiber network.
Sources of Funds
To fund the entire A$110m of consideration paid to Exetel, Superloop will issue a total of ~117 million new ordinary shares, including a scrip component. Indeed, this represents 32.1% of Superloop’s existing shares on issue.
Placement and Entitlement Offer
Superloop’s acquisition of Exetel will be primarily funded by two capital raises providing gross proceeds of ~A$100m. Specifically, these include a Placement and Entitlement Offer:
- Placement: underwritten placement of up to 52.6 million new Superloop shares to new institutional investors and existing shareholders, raising ~A$49m
- Entitlement Offer: pro-rata accelerated non-renounceable entitlement offer of ~A$51m
Following completion of both the Placement and Entitlement Offer, the company anticipates issuing ~107.5 million new Superloop shares.
Superloop will issue all shares via the Placement and Entitlement Offer at a price of A$0.93. Indeed, this represents a 10.6% discount to the last closing price of A$1.04 per Superloop share on June 4, 2021.
Vendor Placement
The remaining A$10m of consideration for Exetel will be paid in Superloop shares. Specifically, Superloop will issue ~9.9 million new shares under this Vendor Placement at a price of A$1.01 per Superloop share.
Transaction Advisors – Equity Raise
UBS and Canaccord Genuity are acting as joint lead managers and underwriters for Superloop’s equity raises. Additionally, Baker McKenzie is Superloop’s legal advisor.