The acquisition will deliver to Superloop strategic assets including ownership of international submarine cable capacity from a SubPartners' consortium which is building a Singapore to Perth network and a Perth to Sydney network.
The Brisbane-based company went into a trading halt on March 31 ahead of the announcement.
Bevan Slattery, Chairman and CEO of the Superloop Group owns 80 percent of SubPartners and says the acquisition will also provide the company with substantial submarine cable experience.
"We are very excited by the prospect of offering customers a fully meshed Pan-Asian network, connecting the existing metropolitan networks which we own and operate," Slattery says.
"Once the cables are complete, we will have even more capacity to meet growing customer demand across the region."
The acquisition takes place as SubPartners announced it has formed a consortium called INDIGO with Google, AARNet, Indosat Ooredoo, Singtel and Telstra to build a major undersea cable system that will connect Australia, Singapore and Indonesia.
The INDIGO cable system is expected to be completed by mid-2019 and once completed it will support initial capacity of at least 4.5 terabits per seconds, which can be increased as technological advancements are made.
Superloop provides digital services in the Asia Pacific and owns 540km of fibre networks in Australia, Singapore and Hong Kong which connects more than 70 of the region's key data centres.
The company says its strategic rationale for the acquisition is that it will be able to develop and expand its cable capacity, independently of the consortium, and allow it to offer Singapore to Perth, Perth to Sydney and Sydney to Singapore to form a seamless system.
Superloop will seek shareholder approval to issue shares to Slattery, and if approved it will take his holding from 28.8 per cent to 29.1 per cent. If shareholders do not approve the issue of shares to Slattery, he will be paid US$2 million.
Serial entrepreneur Slattery founded online educational company iSeek in 1998 and sold it for $27 million in 2000, then started Pipe Networks with Steve Baxter which they sold to TPG Telecom (ASX: TPM) in 2010 for $430 million.
Then it was NextDC (ASX: NXT), a data centre provider, also in 2010 and since then he founded Superloop in 2014 as a spinoff from Megaport (MP1), an interconnection service.
So, just a day after TPG Telecom confirmed it wants to become a major player in Singapore by spending a further $20 million to pick up more spectrum in the country, Bevan Slattery may well again attract the attention of the cashed-up and ambitious telco.
Business News Australia
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