The Swoop Holdings Ltd (ASX: SWP) share price is breaking ranks today following the company's latest announcement.
Earlier today, the telecommunications company's shares were up 12.22% to an intraday high of $1.01. This means since its Initial Public Offering (IPO) in late May, the Swoop share price more than doubled.
At market close, however, the share price has dropped somewhat, now up 7.78% at $0.97.
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What's pushing the Swoop share price higher?
Investors are fighting to get a hold of Swoop shares today following the company's proposed acquisition.
According to its release, Swoop announced that it has agreed to acquire 100% of Wan Solutions (trading as Beam Internet).
Founded in 2015, Beam Internet is the largest privately-owned and operated, fixed wireless network in South Australia. The company offers fast and affordable high-speed wireless broadband on its network of more than 60 towers and masts.
Under the terms of the deal, Swoop will pick up Beam Internet for a total purchase price of $6.7 million. This will consist of $6 million in cash and $700,000 in Swoop shares. However, $1.3 million of the cash will be held back for 12 months for any potential claims or adjustments.
Beam Internet is forecasted to have earnings before interest, tax, depreciation and amortisation (EBITDA) of $1.6 million in FY22. It's expected that this will be materially earnings accretive.
The company expects the transaction to be completed within the next 4 weeks.
Interestingly, Fortescue Metals Group Limited (ASX: FMG) boss, Andrew 'Twiggy' Forrest backed the deal. Tattarang, a holding company for the Forrest family, is a substantial shareholder of Swoop, owning 20% of its shares.
It's also worth noting that Airtasker Ltd (ASX: ART) chair, James Spenceley also sits as chair for Swoop.
Swoop CEO, Alex West made comment on the takeover, saying:
Acquiring Beam is another fantastic opportunity for Swoop to expand our infrastructure coverage into regions we do not have infrastructure. Beam has a recently upgraded and well-built modern network which aligns with our own national network and gives us a strong springboard for growth into the SA market.
We look forward to the opportunities this acquisition provides in establishing a South Australian presence for the Swoop brand.
About the Swoop share price
Since its debut on the ASX boards for a price of 50 cents, Swoop shares have more than doubled. The company's share price hit an all-time high of $1.33 on the day of listing (27 May 2021).
Based on today's price, Swoop has a market capitalisation of roughly $116 million, with approximately 116 million shares on issue.
