Morgans rates SLC as Add To fund the acquisition of private...

Morgans rates SLC as Add

To fund the acquisition of private retail service provider (RSP) Exetel, Superloop has undertaken undertaken a $100m raise and issued $10m worth of stock to the vendor. In addition, management reaffirmed FY21 guidance. Add rating and target rises to $1.33 from $1.27.
The broker highlights the acquisition adds significant scale, generating $150m of revenue and $16m of earnings (EBITDA) on a pro forma, post synergies basis. The latter are considered meaningful with around $2.5m to be realised in FY22 and circa $5m in FY23.
This deal makes strategic sense, adding more traffic and therefore more margin, to the company’s large but underutilised network, explains the analyst.