Spirit offloads select network assets to Maret Group

Julian Challingsworth (Spirit)

Publicly listed Spirit Technology Solutions has transferred selected data centre and network assets to entities associated with the Maret Group.

This move is part of Spirit’s plans to restructure the business and return its managed services component to profitability. 

As part of the transaction, Spirit will receive reciprocal services on a wholesale basis to support its customers. 

This transfer of its ‘network assets’ will have a positive impact to Spirit of about $1.5 - $1.8 million in annualised terms. 

The ‘network assets’ were transferred for a nominal upfront consideration, Spirit said it can receive an earn-out of up to $3 million over two years, subject to revenue targets being achieved. 

Spirit sold its wholesale fixed wireless assets for about $21 million to Maret Infrastructure in May this year. 

At the time, the transaction focused on Maret Group buying the infrastructure assets, whereas Spirit retained the business customer relationships and revenues as well as core network assets delivering that revenue. 

“The expanded wholesale agreement is a continuation of our strategy to focus on technology solutions,” Spirit managing director Julian Challingsworth said. “It accelerates the simplification of our business, allows us to improve our focus on target customer segment and delivers a immediate positive impact to our bottom line.

Under the agreement, these ‘network assets’ which include Spirit’s remaining residential and selected non-core small business customers, will transfer to the buyer from 1 December. 

Spirit has retained and will continue to provide services to its multi-product and large business customers using the network assets under a new wholesale agreement which replaces the existing wholesale agreement with Maret. 

“The transaction continues the growth of data and telco services provided by Maret Group and its related entities. The acquired network assets are complementary to our business units and further enhance the businesses product offerings and ability to grow,” Maret said. 

Spirit faced a ‘very challenging period’ as net profit plunged $53.16 million into the red for the financial year ending 30 June. 

Revenue was up 31.7 per cent to $135.33 million and earnings before tax (EBITDA) was down 36.9 per cent to $7.2 million.

In its report the company said revenue and earnings pressures were largely attributable to the managed services business unit with its other two operating divisions - cyber security, and collaboration and communication - exceeding internal expectations.