Deal hungry Vocus Communications is buying Nextgen Networks, plus two development projects, for up to $861 million to bolster its telecommunications infrastructure and earnings pipeline.
Vocus will fund the deal - which includes one of Australia's biggest national fibre backhaul networks - via a $652 million capital raising, plus existing debt.
Chief executive Geoff Horth said the acquisition of Nextgen Networks from Nextgen Group "greatly enhances" Vocus's existing infrastructure network.
"Owning this critical infrastructure will allow Vocus to connect its metropolitan infrastructure to Nextgen Networks inter-capital fibre optic network, thereby connecting mainland capital cities to each other and to regional and remote areas on one owned network," Mr Horth said on Wednesday.
The deal is Vocus's first acquisition since its $3.75 billion merger with rival M2 Communications in February.
As a result of the tie-up, Vocus owns budget telcos, including dodo, iPrimus, CallPlus and Slingshot.
Vocus expects the deal to be "high single digit" earnings per share accretive in fiscal 2017, including synergies.
The group flagged cost synergies of about $30 million annually.
Vocus also provided a trading update for its financial year ending June 30, forecasting fourth quarter underlying earnings before interest, tax, depreciation and amortisation of between $95 million to $100 million.
The company forecast annual revenue of between $820 million to $835 million and annual underlying EBITDA of between $213 million to $218 million.
Vocus hadn't previously provided specific guidance for fiscal 2016, according to a company spokeswoman.
Initially, Vocus will pay $807 million for Nextgen Networks and the two development projects, North West Cable System and Australia Singapore Cable, and then face conditional payments of up to $54 million in future, subject to certain customer and construction terms.
NWCS is development-stage project to build a 2,000 kilometre submarine cable from Darwin to Port Hedland to service the mining and offshore oil and gas sectors in Western Australia.
The commercial operations are expected to commence later this year.
Vocus is also buying the remaining 50 per cent stake in ASC - a project to build a 4,600km submarine cable connecting Singapore, Jakarta and Perth - from Nextgen Group.
Nextgen Group is 70 per cent owned by the Ontario Teachers' Pension Plan, with remainder held by construction giant CIMIC Group.
Vocus will fund the deal via a fully underwritten equity capital raising of $452 million and an institutional placement of $200 million, as well as existing debt.
The company expects to wrap up the deal by September, subject to clearance from Australia's competition watchdog.
Vocus's shares were placed in a trading halt on Wednesday to allow the company to carry out the capital raising.
The stock last traded at $8.52, giving the company a market capitalisation of $4.54 billion.
Cimic shares gained 49 cents, or 1.4 per cent, to $34.93.
