Atturra Limited to Acquire Plan B, Expanding Cloud and Managed Services in New Zealand
ATA (ATA) Share Update December 2024 Sunday 1st
Atturra Limited Expands Footprint with Acquisition of Plan B
Atturra Limited (ASX: ATA) has announced its acquisition of Plan B, a leading provider of cloud, network connectivity, and managed services in New Zealand, marking a significant expansion in its service offerings.
Instant Summary:
- Atturra to acquire Plan B for NZD20.0M upfront, with potential additional NZD4.5M based on performance.
- Acquisition includes Plan B's five primary data centers across New Zealand.
- Transaction funded by recent capital raise, expected to close by December 2024.
- Strengthens Atturra's managed services and cloud offerings in New Zealand and Australia.
Acquisition Details
Atturra Limited, through its subsidiary Cirrus Networks Holdings Pty Ltd, has entered into a Share Sale Agreement to acquire Morgan Holdco Limited, known as Plan B. The acquisition, valued at NZD20.0 million upfront, with a potential earn-out of up to NZD4.5 million, is expected to significantly bolster Atturra's managed services and cloud offerings.
Plan B operates a national network of five primary data centers across New Zealand, providing a robust infrastructure for cloud and connectivity services. This acquisition will allow Atturra to expand its client base by more than 1000 across Australia and New Zealand.
Strategic Importance
The acquisition aligns with Atturra's strategic goal to become a leader in managed services. CEO Stephen Kowal highlighted that Plan B's established presence and trusted reputation in New Zealand make it an ideal partner for Atturra's expansion plans. The acquisition is expected to provide a stable revenue stream and enhance Atturra's service capabilities.
Plan B's CEO, Frazer Scott, expressed enthusiasm about the partnership, noting the shared focus on customer success and the potential for enhanced service delivery with Atturra's resources.
Financial and Operational Impact
The acquisition will be funded through proceeds from a recent capital raise, as outlined in a presentation to the market in November 2024. The transaction is expected to close by December 2024, subject to customary conditions and approvals.
Integration costs are estimated at approximately AUD580,000. The purchase price is based on a multiple of 6.2x forecast EBITDA, reflecting a strategic investment in Plan B's capabilities and market position.
The acquisition of Plan B is likely to enhance Atturra's market position in the managed services sector, particularly in New Zealand. By acquiring a well-established provider with a strong client base and infrastructure, Atturra is poised to increase its revenue and expand its service offerings. This strategic move could positively influence Atturra's stock as investors anticipate growth from the expanded operations.
Investor Reaction:
Analysts may view the acquisition positively, given the strategic fit and potential for revenue growth. However, the success of the integration and the achievement of performance targets will be critical in realizing the full benefits of the acquisition.
Conclusion:
Atturra's acquisition of Plan B represents a significant step in its growth strategy, enhancing its service capabilities and market reach. Investors should watch for updates on the integration process and performance metrics to assess the long-term impact of this acquisition on Atturra's financial performance.