Swift buys Sydney video services business

Swift Networks has announced the acquisition of a Sydney-based company for $6 million, tapping investors and entering into a debt facility with Bankwest to fund the deal.

Perth-based Swift, which provides telecommunications and entertainment systems to the hospitality, aged care and resources industries, will pay $5.1 million in cash and 3.6 million shares to acquire Movie Source and its wholly owned subsidiary, Video on Demand.

Video on Demand provides internet protocol television services to the hospitality, resources, student accommodation, hospitals and aged care facilities.

In FY17, Video on Demand generated $3.7 million in unaudited revenue.

The acquisition is expected to grow Swift’s site numbers by 67 per cent, and its serviced room numbers by 20,000.

In order to fund the acquisition, Swift has announced plans to raise $4.5 million through the placement of 18 million shares at 25 cents each, and has also entered into a $3 million debt facility agreement with Bankwest.

“While growing our business organically, we have been looking for game-changing acquisitions such as this one and I am delighted to welcome Movie Source and VOD to the Swift Networks Group,” Swift chief executive Xavier Kris said.

“This transaction reduces our content costs and accelerates the strategic plan for vertical and geographical expansion that Swift has outlined consistently since listing on the ASX.

“We are excited to leverage VOD’s strength in the hospitality sector to enable the combined business to become the dominant player in this vertical.

“As we integrate our businesses we look forward to delivering an increasingly compelling service offering to a growing pool of accommodation providers, their guests and residents across Australia and beyond.”

Shares in Swift were 3.7 per cent higher to 28 cents each at the close of trade.