Under the deal, Neural will operate as a wholly-owned subsidiary of Inabox, with Neural founder David Swinton joining Inabox in an expanded role as General Manager – Cloud, while continuing to manage the Neural Networks business.
Inabox (ASX:IAB) supplies wholesale telecommunications products and services, including IT platforms, billing and customer support, to retail service providers around Australia through wholesale brands Telcoinabox and iVox.
Inabox Group Managing Director, Damian Kay said the company had entered into a binding conditional agreement to acquire the business and assets of Neural on a debt and cash free basis. He expects the acquisition to be eps accretive during FY15.
In addition, an earn out payment is payable depending on the financial performance of the Neural Networks business in the FY2015 year.
Kay said that, subject to approval by Inabox Group shareholders, the earn-out may be composed partially of new equity.
Inabox expects the deal to be completed early in July once various pre-sale conditions relating to the transfer of Neural Networks customers have been satisfied.
“Cloud is a key strategic direction for Inabox Group. Our customers’ end users are typically SMEs, where demand for cloud services is extremely high,” Kay said.
“The acquisition of the Neural Networks business sets us up well to take part in the growth of these revenue streams. David has proven he is a great operator and we are excited to have him heading up our cloud strategy.
“This acquisition complements our acquisition of iVox in 2013. Inabox has demonstrated with iVox that it can integrate and gain substantial benefits from strategic acquisitions like Neural Networks.”
Kay said immediate and long term strategic benefits to Inabox from the acquisition included:
• A diverse and profitable group of more than 100 wholesale customers including ICT and managed service providers, purchasing cloud and VoIP services
• A team with experience in building and supporting dynamic next generation cloud and VoIP products
• A next-generation proprietary customer portal able to be used in existing businesses Telcoinabox and iVox
• Other established systems and back of house operations to support cloud products