CommsChoice announces mega-merger with four other companies, set to go public

Sydney-based managed services provider CommsChoice will merge with four other IT companies and float on the ASX to form a $28 million-revenue group.

The deal will brings together CommsChoice with unified communications-as-a-service (UCaaS) provider Telegate, cloud provider Oracle Telecom, and networking and VoIP providers Woffle and Telaustralia.

All five companies will work together under three operating divisions — enterprise and small business for Australian, New Zealand and Singaporean customers, and an international division for Australian multinational companies.

“We believe that a consolidated group will provide significant scale revenue and cost synergies as well as an enhanced product and service offering, and importantly a platform for strong future growth,” CommsChoice Group chief executive Ben Gilbert said.

“CommsChoice has a vendor-agnostic business model and we have 400 modular ICT products and services that we can sell to our clients.”

Joining Gilbert in CommsChoice Group’s executive team are Oracle Telecom managing director Brent O’Shaughnessy as general manager of the business division and Telegate founder Tristan Plummer as general manager of the international division.

Rounding up the leadership team are chief financial officer Patrick Harsas, executive director Grant Ellison and company secretary Andrew Metcalfe.

The combined entity will have about 50 staff across offices in Australia, Singapore and the Philippines, serving just under 3000 clients.

Its suite of solutions will now include UCaaS, software-defined wide-area network (SD-WAN), enterprise mobility management and cloud solutions, all supported by multi- carrier connectivity and CommsChoice’s delivery platform access control as a service (ACaaS).

“We think there’s a tremendous opportunity in the ICT market at the moment, it’s highly fragmented, and we think that provides a business of scale to target selective acquisitions in the small to medium enterprise market,” Gilbert said.

“We’ve spoken to over a hundred companies over the last 12 months and we think there’s a significant opportunity for acquisitions.”

The merger will be funded by a public listing, with 30 million shares offered at 25c a share to raise $7.5 million.

The proceeds of the offer will ensure CommsChoice Group will have sufficient growth and working capital, be able to make further strategic acquisitions, and pay for the costs associated with the listing and the offer.

The offer’s prospectus forecasts a revenue of $27.83 million, up from the approximately $20 million in the five companies’ combined revenue in the 2016-17 financial year.

Telaustralia managing director Tony Dunphy said on LinkedIn: “This important milestone will accelerate our ability to provide optimal ICT solutions that fundamentally transform the way business connects.

“I would like to thank all of our staff past and present for their exceptional efforts in getting us this far, our carrier and vendor partners for their support and expertise, and of course our clients for their trust and loyalty in allowing us to play an important part in their business journeys.”

CommsChoice Group is expected to list on 20 December.