Huge Group Buy Otel Communications

huge group
huge group
JSE-listed tech firm Huge Group announced on Thursday it is buying Otel Communications in a share-swap deal involving its subsidiary, Huge Networks.
The deal will result in Huge Telecom owning 50.03% and Otel owning 49.97% of HugeNetworks respectively.

The Otel brand will be migrated to the Huge Networks brand during the course of 2019.

Huge Networks is a data service provider and communications company. Otel is an ICASA-licenced provider of Voice over Internet Protocol (VoIP) and broadband Infrastructure-as-a-Service telecommunications solutions, including voice, connectivity and hosted services, to some 2 500 SME customers, nationally throughout South Africa.

“The transactions allow Huge to progress its ‘Growing Huge Strategy’ by scaling its operations and growing Huge’s real estate of customers,” the company informed investors.

“In addition, the transactions expand both the national reach and footprint of Huge, while also increasing its network capacity and connectivity options and allowing for network synergies and efficiencies.”

The VoIP and related products and services acquired through the transactions will allow Huge Networks to become a more substantial provider of end-to-end ICT services.

“It will also provide Huge Networks with an opportunity to enter new customer segments,” the company disclosed.

“Economies of scale leveraged from the transactions will enable Huge Networks to provide its customers with a diversity of cost-effective ICT products and services.”

Following the transactions, Huge Networks will be well-positioned to capitalise on the further expansion of the ISP and ICT service provider industry through various organic and acquisition growth strategies.

Huge Networks has been independently valued at an aggregate valueof R69 million and therefore the transactions have been valued, for JSE categorisation purposes, at a fair value of R34.5 million (being the fair value of the dilution in Huge Telecom’s shareholding in Huge Networks).


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