Why the 5G Networks (ASX:5GN) share price is storming 5% higher

The 5G Networks Ltd (ASX:5GN) share price is pushing higher today after announcing a new acquisition this morning…

asx shares involved with cloud tech represented by illuminated cloud on circuit board

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The 5G Networks Ltd (ASX: 5GN) share price is on the move this morning after announcing a new acquisition.

At the time of writing, the telecommunication carrier's shares are up 5% to $1.30.

What did 5G Networks announce?

This morning 5G Networks announced an agreement to acquire 100% of leading dedicated cloud provider, Intergrid Group.

According to the release, the two parties have agreed a purchase price of $3 million. This represents a 4x normalised EBITDA multiple. The purchase price comprises $2.5 million in cash and $0.5 million in 5G Networks shares. The cash consideration will be funded from its existing cash reserves.

Synergies of $0.5 million per annum are expected to be realised in the first 12 months.

What is Intergrid?

Intergrid operates cloud hosting services within data centres strategically located in seven major cities across both Australia and New Zealand.

The Intergrid network is connected to over 40 data centres, optimising speed and web content delivery by reaching most of the Australian population in under 20 milliseconds. It supports high-speed streaming to households, powers Ag-Tech Internet of Things devices on farms, supports critical government applications, and everything in between.

The company currently generates annual revenue of $2.5 million and normalised EBITDA of $0.8 million.

5G Networks Managing Director, Joe Demase, commented: "5GN are really excited to be working with Intergrid in growing our digital infrastructure capabilities. In a very short period they have developed a valuable customer base with many blue-chip ASX 200 and government customers who are committed to pursuing a cloud experience which is unique and world class."

"The capability for 5GN to now offer (Bare Metal) services at the edge, means that we can deliver dedicated cloud or hosting solutions pretty much to the front door of every major organisation in Australia. This enables content and application performances which are absolutely best in market."

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends 5G NETWORK FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Gainers

A man looking at his laptop and thinking.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a disappointing hump day session for the ASX today.

Read more »

The silhouettes of ten people holding hands with their arms raised against the sky, as the sun rises or sets in the background.
Share Gainers

Here are the top 10 ASX 200 shares today

The ASX managed to bank a small rise this Tuesday.

Read more »

Sport trainer talking to little girl who is climbing wooden ladder in gym.
Share Gainers

Why Vault Minerals, Droneshield, Westgold Resources shares are climbing higher today

These shares are gaining on Tuesday, but why?

Read more »

A young woman smiles as she rides a zip line high above the trees.
Financial Shares

5 best ASX 200 financial shares of FY25 (CBA didn't make the cut!)

These stocks were well and truly 'in the black' for share price growth last financial year.

Read more »

Excited group of friends sitting on sofa watching sports on TV and celebrating.
Share Gainers

Why Amaero, Black Cat, Domino's, and Ramelius shares are racing higher today

These shares are having a good session on Tuesday. But why?

Read more »

Ten happy friends leaping in the air outdoors.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a rough start to the trading week for investors this Monday.

Read more »

two computer geeks sit across from each other with their laptop computers touching as they look confused and confounded by what they are seeing on their screens.
Share Gainers

ASX tech shares outperformed US tech stocks by 2:1 in FY25. Here's why

Forget the Magnificent 7! Aussie tech shares had twice as much price growth as US tech stocks in FY25.

Read more »

Three happy office workers cheer as they read about good financial news on a laptop.
Share Gainers

Why Bellevue Gold, Cobram, Hub24, and Nanosonics shares are pushing higher

These shares are starting the week on a positive note. But why?

Read more »