Vonex IPO

TERM SHEET 4-5 June 2018


Vonex is a full service and award-wining telecommunications service provider selling mobile, internet, traditional fixed lines, hosted PBX and VoIP services predominantly to small to medium enterprise ("SME") customer under the Vonex brand. The Company also provides wholesale customers, such as internet services providers, access to the core Vonex PBX and call termination services at wholesale rates via a white label model. In addition, Vonex has developed a multi-platform voice, messaging and social media app – “Oper8tor” - that allows users to connect with all social media friends, followers and contacts, from a single app.

As a measure of just how robust this company has been, VONEX managed to survive and grow through four cash-starved years to 30 June 2017. During this difficult period, VONEX achieved revenue growth at a most healthy clip of ~24 % pa. This was achieved despite a period of stiff challenges imposed by the Australian regulator (ASIC) and ASX, as they both sought to bring the company’s management team into line.

The rollout of the National Broadband Network (NBN) over the next few years will require millions of customers having to disconnect from Telstra’s copper/landline network and reconnect to the new (government-owned) fibre-optic network. This represents a massive “once-in-a-lifetime” opportunity in the Australian telecommunications sector for nimble technology-driven telco players like Vonex.

The VONEX IPO released this week should see this globally unique enterprise entering a most exciting growth phase.

With a competent board, and past issues with the regulators having now been put well behind them, we believe that VONEX investors can face the future with confidence. Now the business has turned cash positive, the company’s impending return to the boards of ASX should see VONEX firing on all cylinders.

This current raising of A$7m on ASX, Australia’s premium exchange, means it is well-placed to significantly accelerate its growth. Recently Mr Fahey was instrumental in leading VONEX’s winning its largest ever customer deal. The contract is to supply ASX listed Inabox, which has more than 400 wholesale telecommunications customers. VONEX won this contract against stiff global competition, including from Broadsoft, the global leader in this space.

We believe that VONEX, with a fresh and vibrant approach to global media via it’s Oper8tor mobile app, now has the potential to build a significant position in the highly competitive global social media markets. It has a product that has the potential to attract tens of millions of users rapidly through is unique connectivity. We expect that this fresh injection of funds will soon see the company sitting confidently amidst a select group of global social media companies. So make no mistake, VONEX looks much like it could now be on the path to success. In our view, any detractions are based largely upon how VONEX once was, not on how it is today and promises to be in the future.

Note: State One Stockbroking’s indicative Vonex valuation - including a deeply discounted valuation for the Oper8tor Application - is $150m (68c per fully diluted share). This compares to the IPO issue price of 20c.


For further information, call your State One adviser at 08 9288 3388 or 1300 651 898 or
Email: [email protected]

The offer of securities is made in the Prospectus lodged with ASIC by Vonex Limited on 26/04/2018 (“Prospectus”). Anyone wishing to acquire securities should read the Prospectus in its entirety and complete an application form contained in, or accompanying, the Prospectus. An electronic copy of the Prospectus may be viewed at https://investors.vonex.com.au/offer/.

Issuer Vonex Limited (ACN 063 074 635) Stock Exchange Code VN8
Transaction Type Initial Public Offer (IPO) onto the Australian Securities Exchange (ASX)
Offer Details A$6m (min) – A$7m (max) via a Public Offer, incorporating a A$1m Priority Offer to existing shareholders. New shares not subscribed for under the Priority Offer will be available for subscription under the Public Offer. The Priority Offer closes earlier than the Public Offer to facilitate this process.
Offer Price
  • 20c to receive 1 fully paid share.
  • Participants in the IPO to receive a 1 for 4 free attaching option exercisable at 20 cps two years after listing on the ASX. These options will be tradeable on ASX, concurrent with the fully paid shares.
Other Issues Priority Offer and Over-Subscriptions: Handled by State One Equities.
Lead Manager & Underwriter State One Equities Pty Ltd. Contact: Alan Hill at + 61 (0) 413 569 288 or +61 (0) 8 9288 3338
Note: A$5.5m of the A$6m Public Offer to be underwritten by State One Equities Pty Ltd.
Inter. Placing Agent Ragnar Capital (UK) and State One Equities
Market Cap A$44.2m (at 20 cps issue price and 220.8m fully diluted shares). Enterprise Value: A$27m (incl. 20c options)

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