Vonex acquires Gold Coast telco OntheNet for $9.6 million

Telco services company Vonex has acquired Gold Coast-based telco, telephony and hosting provider OntheNet for $9.6 million.

The acquisition expands Vonex’s product offerings to include data networks, backed by OntheNet’s core network with seven points of presence across Australia, as well as a tier 3 data centre facility in the Gold Coast.

Founded in 1994, OntheNet specialises in data network, voice and hosting/colocation services primarily to business customers across Australia. It has 35 staff, including an engineering team that specialise in data networking.

“We are delighted to have been acquired by emerging telco Vonex. We look forward to partnering with Vonex and continuing to provide high quality services to our customers,” OntheNet managing director Tak Woo said.

“Vonex’s technical capability in voice widens the product set that we can offer our customers and is a natural fit with our expertise in data networks. Vonex’s network of channel partners will provide an exciting growth opportunity and allow us to better leverage our footprint.

“We have long been impressed with Vonex’s technical capability, as well as commitment to customer service and these were significant factors in our decision to partner with Vonex.”

The $9.6 million purchase price comprises $7.7 million in cash and $1.9 million escrowed Vonex shares, partially funded through debt provider Longreach Credit Investors.

Vonex said the acquisition would deliver 40 percent growth in annualised recurring revenue to $51 million, with most of OntheNet’s revenue being recurring in nature. The company also expects the combined business to deliver $52.4 million of revenue and $8.5 million of underlying EBITDA on a FY22 pro forma basis.

Vonex managing director Matt Fahey said, “This is a highly strategic acquisition for Vonex. It expedites our plan to diversify our product suite, in particular adding market leading data network services.

“OntheNet is a high-quality telco business that delivers data network, voice and hosting/colocation services primarily to business customers. Both businesses strive for excellence in customer service, with an excellent cultural fit.

“We are very excited to welcome the talented and highly specialised team from OntheNet to Vonex and look forward to a positive 2023 financial year, as we continue to execute our strategy for organic and inorganic growth.”

OntheNet is Vonex’s first acquisition since acquiring Adelaide telco wholesaler Voiteck in December 2021, which fuelled its expansion into South Australia at the time. The company also acquired MNF Group’s direct business and Sydney-based Nextel in the same year.