Is Vocus Communications Limited on the path to blockbuster success?

Vocus Communications Limited (ASX:VOC) has announced two new acquisitions.

Tom Richardson

Tom is a holder of the CFA Society of the UK administered Investment Management Certificate (IMC) and has more than a decade's professional experience in the investment management industry in Australia and the UK. Tom now works as a writer and editor for TMF Australia and has two easy to remember rules of investing he likes to follow. Avoid overpaying for growth stocks and avoid paying at all for stocks that are cheap for a reason. Tom prefers growth investing over value investing and says it's not rocket science, just avoid overpaying for the best returns.

Published February 13, 2015 10:47 am AEDT

High-speed internet and data centre services business Vocus Communications Limited (ASX: VOC) today announced it has acquired two new data centres for $23 million.

The two data centres located in the high-demand cities of Sydney and Melbourne will be funded from existing cash resources and are expected to generate annualised EBITDA of $4.7 million.

Vocus will now have a total of 11 data centres across Australia and New Zealand serving the data storage and business continuity needs of major corporate clients.

Growth

In servicing demand for fast and reliable internet connectivity alongside data storage requirements, Vocus would appear to be right in the middle of the digital future's growth sweet spot. Revenues are earnings have been ballooning and the business expects to merge with rival operator Amcom Telecommunications Limited (ASX: AMM) in the months ahead.

Not only will the merger mean both businesses lose their closest rival, but the combined entity will have greater firepower to take on bigger rivals like Telstra Corporation Ltd (ASX: TLS) or iiNet Limited (ASX: IIN).

Given the successful track record so far and improved outlook of the combined entity, Vocus may well still have a blockbuster future.

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