Vocus Communications has formally completed its $861 million acquisition of Nextgen Networks, clearing the way for the company to pursue the oil and gas market.
The acquisition includes Vocus taking full control of Nextgen’s North West Cable System (NWCS) and its 50 percent stake in the Australia-Singapore Cable (ACS) development joint venture between the companies for a consideration of $54 million.
The latter component of the deal had been subject to Nextgen securing commitments to buy capacity on the cable.
"The acquisition of the NWCS project will enable Vocus to increase penetration of the mining and offshore oil and gas sectors. The cable is now operational and underwritten by foundation customers on long-term contracts," Vocus chief executive Geoff Horth said in a statement.
Vocus is estimating $30 million in “synergies” from the deal.
The acquisition, which makes Vocus a major player in the Australian cable networks market, was expected to hit regulatory hurdles when first announced in June.
The Australian Competition and Consumer Commission (ACCC) scrutinised the deal closely but found that it raised few concerns in the industry.
“In assessing this potential transaction, we took into account that Nextgen is the only remaining significant supplier of wholesale transmission services that isn’t vertically integrated,” chairman Rod Sims said in a statement at the time.
He later said small brodband players had indicated they were “not generally reliant on Nextgen to be able to compete”.
However, noting that cable infrastructure was becoming concentrated in the hands of a few major players including Telstra, Optus and TPG, Sims warned that any future similar deals would come under greater scrutiny.
The completion of the Nextgen Networks follows a period of internal turmoil at the company after Vocus founder James Spenceley and fellow board member Tony Grist quit the business earlier this month following a failed attempt to oust CEO Geoff Horth.