Huge Telecom, a wholly-owned subsidiary of Huge Group, has concluded an agreement to acquire Otel Communications’ 49.98% share in Huge Networks for R15 million.
Following this deal, Huge Networks will become a wholly-owned subsidiary company of Huge Telecom.
Huge Networks was founded in 2008 and, following a few acquisitions and mergers, created a large provider of broadband, voice, and cloud-based services.
To understand Huge Networks’ journey, it is necessary to go back five years.
On 30 March 2017, Huge Group acquired ConnectNet. As part of the deal, Huge Telecom acquired Sainet for R25.8 million.
Sainet was a wholly-owned subsidiary company of ConnectNet, which ConnectNet had acquired a few years earlier for R25.8 million.
Shortly after these transactions, ConnectNet changed its name to Huge Connect, and Sainet changed its name to Huge Networks.
At the time, the annual revenue generated by Huge Networks was R37.5 million.
In 2019, Huge Group acquired Otel and merged it with its subsidiary Huge Networks.
It settled the purchase by issuing Huge Network shares, after which Huge Telecom owned 50.03%, and Otel owned 49.97% of Huge Networks.
Adding Otel to the Huge Networks stable helped it increase annual revenue to R104.8 million over the last financial year. It has EBITDA (earnings before interest, taxation, depreciation, and amortisation) of R13.5 million.
Huge Group director Andy Openshaw said the two-year payback profile made the deal to acquire Otel Communications’ 49.98% share in Huge Networks attractive.
“Owning 100% of Huge Networks will make it easier to scale Huge Networks further,” he said.
“We have identified numerous target companies with which to scale Huge Networks. You can expect us to be far more active in trying to merge or acquire more companies with Huge Networks.”
Huge Networks MD Marius Oberholzer said his primary focus is positioning Huge Networks as a security and data service provider, offering secure data, voice, and network services.
“My further focus is increasing average revenue per user and securing new business with a differentiated product and service approach,” he said.
Source: MyBroadband
