Bigblu Broadband sells Australian unit for up to AUD$50.2m

Bigblu Broadband plc (AIM: BBB.L), a significant provider of super-fast and ultra-fast alternative broadband services, has conditionally agreed to sell its Australian subsidiary, SkyMesh Pty Ltd, to SKM Telecommunication Services Pty Ltd for up to AUD$50.20 million (approximately £25.67 million). SKM Telecommunication, formed by Salter Brothers Asset Management for the acquisition, will pay the headline price in a combination of cash, shares, and deferred cash considerations.

The sale is expected to yield an initial cash consideration for shareholders while retaining a stake in the business, offering potential future benefits from SkyMesh under its new ownership. The headline price represents a substantial return on the Group’s investment in SkyMesh, with a figure up to 2.2 times the aggregate consideration paid for the acquisition and subsequent acquisitions of SkyMesh.

The completion payment, after transaction fees, will be allocated towards paying down the revolving credit facility with Santander (BME:SAN) Bank, with the net cash proceeds intended for distribution to shareholders. The company also plans to retain a 33.7% pre-dilution stake in the ongoing business of SKM Telecommunication.

Frank Waters CEO of Bigblu Broadband, expressed satisfaction with the deal, highlighting the alignment with the company’s strategic objectives and the transformative expertise and growth capital brought by SKM Telecommunication, which positions SkyMesh for a dynamic development phase.

The disposal requires approval from shareholders at a general meeting, as it constitutes a fundamental change of business per AIM Rules. The meeting is scheduled for 20 December 2024 at the offices of Harwood Capital LLP in London.

The Board recommends the transaction, considering it in the best interest of the shareholders. Directors holding 2.23% of the company’s total voting rights have irrevocably undertaken to vote in favor of the resolution.

This transaction is based on a press release statement and reflects the company’s strategic review to maximize shareholder value from its assets. Bigblu Broadband’s decision to sell SkyMesh follows considerations of various options, including management buyout, trade sale, or an ASX listing for SkyMesh, with the terms offered by SKM Telecommunication deemed most valuable for shareholders. Investing