The Uniti Group Ltd (ASX: UWL) share price is pushing higher on Tuesday morning.
At the time of writing, the growing telecom company’s shares are up 2% to $1.61.
Why is the Uniti share price pushing higher?
Investors have been buying the company’s shares after it announced a new acquisition.
According to the release, Uniti has entered into a binding agreement to acquire 100% of the issued capital of specialist broadband Retail Service Provider (RSP), Harbour ISP.
Harbour is a fast-growing RSP, specialising in the delivery of retail broadband services to greenfield housing estates and multi-dwelling unit (MDU) developments.
At present, the ISP has more than 30,000 broadband customers nationwide. Uniti notes it also has a reputation for delivering high quality customer service, evidenced by its strong customer retention levels and sustained growth in customer numbers.
Harbour is a current RSP on the Opticomm Ltd (ASX: OPC) and Uniti owned fibre networks and is a reseller of NBN.
What will this cost Uniti?
The two parties have agreed a purchase consideration of $9.25 million and 1 million Uniti options with an exercise price of $1.54.
Management is forecasting an earnings contribution, including synergies, of $3 million+ in FY 2022, which represents a purchase multiple of ~3x EBITDA.
It feels it is a highly strategic and accretive acquisition, enabling greater penetration and revenue expansion on Uniti-owned fibre networks, including those added via the recent OptiComm acquisition.
Uniti’s CEO and Managing Director, Michael Simmons, commented: “We are delighted to have acquired Harbour ISP. Functional separation now enables us to actively promote retail broadband offerings on our owned networks and Harbour ISP, with its proven pedigree in the greenfield broadband market, is an outstanding platform for us to build specific capability as well as scale in our CBE business unit.”
“With the now confirmed addition of OptiComm to the Uniti Group, our network of private fibre premises (connected, under construction or contracted to be connected) exceeds 400,000 connections. Given this large and growing footprint, the strategic value of acquiring Harbour as a specialist greenfield RSP is significant and timely. We look forward to our CBE business, inclusive of Harbour ISP, continuing to profitably expand as further penetration and growth in average revenue per user on our owned fibre networks is delivered,” he added.