The trail of M&A that led to surprise Anittel buyout

Today’s news that Anittel is to be bought out follows a rollercoaster ride of acquisition-fuelled growth then profit underperformance for the national IT and telecommunications chain.

The Sydney-headquartered firm was clearly an attractive acquisition candidate for its suitor, fellow ASX-listed buyer Inabox. It boasts an extensive roster of vendor partners, including the likes of Microsoft, Cisco, HP and Dell, and a footprint that spans the country.

The final sale price will be in the region of $8.4 million to $9.9 million, depending on a $1.5 million cash consideration that is payable in the second half of 2015, subject to performance. 

Anittel's chairman, Peter Kazacos, is no stranger to deal-making, having built up and sold off Kaz to Telstra for $333 million in 2004.

Under the deal, Kazacos will stick around "to consult to Inabox on its integration and future growth strategies". He will also own approximately 10.6 percent of the group.

Anittel as it is today was born out of M&A, when public group Hostech rolled up Anittel, Accord Technologies, Axxis and Aspirence in 2010.

The group continued its run of acquisitions, growing its ranks in regional areas by snapping up several resellers. In 2011, the company bought Future Townsville and Dubbo’s IT West.

Along the way, Anittel took the No.1 spot on the CRN Fast50 twice in a row.

However, years of losses have seen Anittel pour its energy and resources into restructuring.

This includes the $6.5 million sale of its network and carrier business to BigAir, which was completed early this year. At the time Anittel executive chairman Peter Kazacos said the company wasn’t at the level to continue investing in its carriage business. 

Anittel has recorded a net loss for the past five years in a row, including a $19.9 million loss for the 2011 financial year. In the 2014 financial year, Anittel recorded a net loss after tax of $3 million compared to $7.3 million the year before.

Revenues have also suffered. After climbing to $59.6 million in 2011, Anittel revenues have fallen to $43.3 million for 2014.

Its share price has tanked over recent years, teetering around half a cent since March 2011. This was down from 4c in March 2010, and a massive fall from the 16c-mark, where it sat for much of 2006-07.

According to Anittel's 2014 annual report, the company was on a “substantially more solid footing” going into the 2015 financial year.

Meanwhile, Inabox has been making its own headway in the cloud space. In June, it announced the buyout of cloud and VoIP provider Neural Networks.

The deal gave the company more than 100 wholesale customers not dissimilar to system integrators and MSPs it already had in another part of the business. The Inabox business also includes the brands Telcoinabox, iVox and Neural Networks.

If the Anittel acquisition goes ahead, the two companies hope to create what they described today as “end-to-end provider of ICT services, positioning Inabox as a strong challenger in the converged ICT and cloud markets".