Little known micro-cap 5G Networks Ltd (ASX: 5GN) this week announced its intention to acquire a Melbourne data centre for $5.7 million on a multiple of 7x EBITDA with the deal to be funded via cash and debt. It should also bring an additional $3 million in annualised revenue as the deal continues 5G's acquisitive growth strategy.
5G Networks reports that it's an enterprise internet services and data centre company, with more than 2,000 business customers including several top 50 ASX-listed businesses.
For the quarter ending December 31 2018 it posted an operating cash profit of $520,000 on revenue of $14.25 million, with cash on hand of $2.8 million.
It also expects revenue and EBITDA growth to accelerate over the second half of the fiscal year from already high rates.
Management also flagged that its 'strong' operating cash flow and a $1.3 million franking credit will allow it to pay a full year dividend, with a claim that this will be ongoing.
As such 5G Networks may be worth more research for micro-cap enthusiasts alongside the likes of Bigtincan Holdings Ltd (ASX: BTH) or more established communications player MNF Group Ltd (ASX: MNF).
