InQueensland

NEWS •⁠ POLITICS •⁠ BUSINESS •⁠ CULTURE

Get InQueensland in your inbox Subscribe

Broker backs Slattery's move on internet company

Business

Morgans has backed Superloop’s $110 million takeover of internet service provider Exetel and said it would lead to an increase in earnings of around 50 per cent.

Print article

Another benefit would be that Superloop, founded by Bevan Slattery who also holds a 17 per cent shareholding, was not likely to be paying any tax in the immediate future.

“We forecast Superloop to now generate free cash flow of more than $10 million in full-year 2022 and this more than doubling in full-year 2023 as synergies kick in,” Morgans senior analyst Nick Harris said in a note to clients.

Superloop will fund the acquisition through a $100 million capital raising. It announced yesterday that it had been swamped by institutions that took up more than $70 million in new shares.

“The acquisition adds significant scale to Superloop, generating $150 million of revenue and $16 million of earnings before interest, tax, depreciation and amortisation (EBITDA),” Harris said.

“This deal makes strategic sense, adding more traffic and therefore more margin to Superloop’s sizeable but underutilised network.

“Superloop has sizeable tax losses which means under the combined entity no tax is payable for the immediate future.”

 

 

More Business stories

Loading next article