The Swoop Holdings Ltd (ASX: SWP) share price has surged up today after the company announced a new acquisition.
Swoop is an Australian fixed wireless and wholesale network infrastructure carrier that listed on the ASX through the reverse takeover of Stemify Ltd (ASX: SF1).
Stemify was formerly an edu-tech company with a market capitalisation of just $3 million. Swoop successfully took Stemify's place on the ASX on 27 May this year.
At the time of writing, the Swoop share price is up 5.49% to 96 cents.
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What did Swoop acquire?
In today's release, Swoop announced an agreement to acquire 100% of Victoria-based wireless broadband provider, Kallistrate Pty Ltd.
This acquisition will cost $1.75 million, comprising $1.225 million in cash and $525,000 in Swoop shares.
The acquired company operates under the name Speedweb, which offers fast and affordable high speed wireless broadband in the Gippsland and Latrobe Valley areas of Victoria.
The company has a network of more than 50 towers and masts, with more than 1,800 services in operation to cover major towns including Morwell, Moe, Traralgon, Trafalgar, Churchill, Newborough and Walhalla.
No phone line is required to use Speedweb services, which could be an advantage over competitors.
Swoop's existing network borders the Speedweb fixed wireless network in West Gippsland. Swoop believes this could be an opportunity to expand its network across that region and capture additional market share.
What did management say?
Swoop CEO, Alex West commented on the acquisition:
Acquiring the neighboring network in West Gippsland is a fantastic opportunity for Swoop, it will neatly increase the coverage of our existing regional infrastructure footprint.
We look forward to the opportunities this acquisition provides in terms of expanding our market share in the Gippsland region and we welcome the Speedweb customers to Swoop.
The Swoop share price so far
Before listing on the ASX, Swoop successfully raised $20 million at 50 cents per share.
On its first day of listing, the Swoop share price ran as high as $1.33 before a $1.14 close.
Despite a strong showing on its first day, the Swoop share price has slumped 20% to a close of 91 cents last Friday.
This might come as no surprise given the short-lived upside of other recent initial public offerings such as MyDeal.com.au Ltd (ASX: MYD), Adore Beauty Group Ltd (ASX: ABY) and Youfoodz Holdings Ltd (ASX: YFZ).
