Perth voice and data provider Comdek has agreed to buy Tasmanian satellite broadband provider eSat for a consideration of 5.3 million shares and 6.7 million convertible notes.
Comdek and Hobart-based eSat Communications signed a sale of business agreement on Christmas Eve, Comdek said in a statement released to the ASX.
The listed Perth company has agreed to pay a consideration of 6.7 million convertible notes at a deemed price of 16.64 cents each and 5.3 million shares for eSat, subject to shareholder approval and customer acquisition targets.
Haydn Collins, managing director at Comdek, said the deal would allow Comdek to deliver satellite voice and data services to regional Australia with the equipment at the user end.
“That was previously too expensive for the individual user to be practical, provided or subsidised by the Federal Government,” Collins said.
Also, eSat must issue five million shares at a price of 12 cents each, with the aim of raising $600,000 in working capital by 31 January.
Comdek was expected to inherit eSat’s accreditation under the Federal Government’s $107.8 million HiBIS scheme as part of the deal.
“eSat arranged for a $250,000 marketing fund that had been partly used to begin marketing the HiBIS products,” Comdek said. “The remainder of the marketing fund will be transferred to Comdek.”
HiBIS offers registered internet service providers incentive payments to supply higher bandwidth services to regional, rural and remote areas at prices comparable to similar metropolitan services.
“The eSat business has been trading for some time but only achieved HiBIS accreditation in the last few months,” Comdek said.
eSat had been marketing HiBIS-registered products in the last two months and had signed up some 260 new customers by Christmas, the company said.
Two eSat directors would be nominated to the Comdek board at an upcoming annual general meeting, Comdek said.
Comdek has been around for some 20 years. It specialised in data reticulation services and began operating as an ISP in 1999, the company said.