Tomizone inks deal to buy Bluesky Online Services for $A276k

Auckland-based Tomizone said it has inked a deal to buy Bluesky Online Services for a combination of cash and shares worth A$275,900 as it looks to grow its business.

The ASX-listed wi-fi service provider said it has signed an agreement to buy all the business and assets of the Auckland-based managed services company for A$142,500 in cash and the issue of 6.67 million Tomizone shares. At the stock's last trading price of 2 Australian cents a share, that puts a value of A$133,400 on the scrip component.

"This acquisition is the first step in our goal to position Tomizone so that we control all aspects of our business and can offer more products and services to our existing customer base," said Tomizone chairman Ian Bailey. The deal is a "first and important step" and it is currently evaluating other additional acquisitions, he said.

The purchase will drive customer base growth by giving the Tomizone wi-fi business access to Bluesky's customer base including businesses operating in medical centres and dental clinics, it said. The deal builds on Tomizone's existing network of more than 2,000 data access points across Australia and New Zealand and lets Tomizone offer a range of additional managed services such as VOIP, IT management and wireless access management.

As part of the transaction, it will appoint Bluesky managing director Gary Myburgh as Tomizone's chief information officer, with responsibility for all technical aspects of the business. Myrburgh is Bluesky's sole director and shareholder via an entity called Huddle Ltd, Companies Office records show.

Tomizone joined ASX through a reverse listing on June 1, 2015 but faced significant challenges due to delays with product feature launches and organisational readiness, and has reported consecutive losses. In its preliminary final report for the year ended June 30 it reported a net loss of A$4.2 million, narrower than the A$4.6 million loss in the prior year. Revenue, however, slipped 19.8 percent to A$2.2 million as consumers shift to free wi-fi usage and it continues to transition to a subscription based model "consistent with shifting market demands," it said.

In July it announced the appointment of Ian Bailey as chairman, replacing Tarun Kanji whose resignation was effective immediately and followed the exit of director Januario Atencio. Chief executive Geoff Wanless also resigned in July due to the "changing nature and restructuring of the business over the past year."

(BusinessDesk)