Comms Group Sells onPlatinum IT Division for $30 Million to Focus on Cloud
Comms Group has agreed to divest its onPlatinum IT managed services division for A$30 million, a move that simplifies its business and boosts balance sheet strength ahead of FY27.
- onPlatinum sold for A$30 million including escrow
- Divestment aligns with core cloud and unified communications strategy
- Transaction proceeds to reduce debt and return capital to shareholders
- FY26 revenue guidance raised to $74-75 million with EBITDA up 45%
- Transition services agreement ensures operational continuity post-sale
Strategic Divestment to Refocus on Core Telecoms
Comms Group Limited (ASX:CCG) has agreed to sell its IT managed services arm, onPlatinum, to efex for a total consideration of A$30 million, comprising A$28.5 million upfront and A$1.5 million held in escrow for 12 months. The deal, subject to customary completion conditions, represents a significant step in Comms Group's renewed focus on cloud communications, unified communications, and domestic telecom services.
The sale follows onPlatinum's 2022 acquisition for $12 million, which had expanded Comms Group’s footprint in managed IT and cloud services across Queensland, New South Wales, and Victoria. However, the divestment will simplify the group’s structure and funnel resources back into its high-growth core businesses.
Balance Sheet Strength and Capital Return
Proceeds from the sale will be applied to reduce net debt and fortify the balance sheet, with a portion earmarked for capital return to shareholders. This financial repositioning provides Comms Group with enhanced flexibility to invest in organic growth and product development initiatives. The company has engaged Q Advisors as financial advisor for the transaction.
Comms Group CEO Peter McGrath acknowledged onPlatinum’s contribution since acquisition, praising its strong reputation and loyal customer base. He emphasised that the divestment allows both entities to pursue their strategic priorities with greater focus, particularly Comms Group’s push into global unified communications and cloud telco services.
FY26 Guidance Reflects Robust Growth Trajectory
The company reaffirmed its FY26 guidance with revenue expected between $74 million and $75 million, marking a 31.8% increase year-on-year, and underlying EBITDA forecast at $8.0 million to $8.5 million, up 44.7%. This outlook includes about $500,000 in duplicated network costs across the Next and TasmaNet businesses, slated for removal in FY27. Integration of the TasmaNet acquisition remains on schedule for completion by July 2026.
These figures build on a strong first half of FY26, where Comms Group posted a 39% revenue surge and nearly doubled EBITDA, driven by organic growth and acquisitions such as TasmaNet. The divestment of onPlatinum is expected to reduce group revenue and earnings, but management views this as a trade-off for a leaner operating model focused on scalable communications platforms.
Transition Services to Maintain Operational Continuity
To ensure a smooth handover, Comms Group will provide transitional services for 12 months post-completion across select operational and corporate functions. Reciprocal arrangements will see onPlatinum continuing to support Comms Group’s telco-related services. This transition safeguards customer, supplier, and employee continuity during the changeover.
The transaction is expected to settle in Q1 FY27, after which Comms Group will update the market on the detailed financial impact and capital return plans. The company also plans an investor conference call on 1 July 2026 to discuss the sale and trading update.
Bottom Line?
The onPlatinum sale marks a decisive pivot by Comms Group to consolidate its cloud communications leadership, with capital returns and debt reduction poised to underpin future growth.
Questions in the middle?
- How will the divestment impact Comms Group’s recurring revenue profile post-FY27?
- What specific capital return mechanism will the company adopt following completion?
- Can Comms Group sustain its accelerated growth trajectory focusing solely on core communications?
