The Vonex Ltd (ASX:VN8) share price has exploded 23% today after the company announced news of a multi-year agreement. We take a closer look.
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Vonex Ltd (ASX:VN8) shares have exploded today after the company announced a multi-year wholesale agreement. In morning trade, the Vonex share price rocketed to an all-time high of 32.5 cents. However, some investors were quick to take profits, slightly retracing the company’s shares to 32 cents, at the time of writing, up 23.08%.
What’s driving the Vonex share price to new highs?
The Vonex share price is on the rise today as the company secured another contract to complement its wholesale business.
According to this morning’s release, Vonex advised it has signed a multi-year wholesale agreement with Orange Business Services, through its wholly-owned subsidiary, 2SG Wholesale.
Headquartered in Paris, France, Orange Business Services is a communications solutions company servicing over 220 countries. The group provides hardware, cloud computing, voice and data management, network infrastructure, multimedia, security, supply chain management, and collaboration services.
Under the agreement, Vonex will provide business-grade mobile broadband services to Orange Business services across Australia. The deal will be used to support the launch of new products that will offer the latest connectivity for Orange Business Services’ customers. These include clients operating within industries such as automotive, mining, oil & gas and public sectors.
Vonex noted that the latest contract award reflects its growing wholesale business. The company aims to deliver best-in-class products and services to both new and existing telco customers.
What did management say?
Vonex managing director Matt Fahey welcomed the deal, saying:
We are delighted to partner with Orange to support Orange Business Services’ expansion plans in Australia. Signing this agreement is testament to the growth and maturity of our offer to small, medium and enterprise customers, as we are seeing strong growth across both existing and newly-launched products.
Orange managing director of Australasia Kevin Griffen went on to add:
With this agreement, Orange will offer enterprises the ability to combine NBN connectivity with wireless broadband services through one provider only. This will bring great simplicity as well as strong, fast and stable connection which were once reserved for MPLS and the largest companies.
Vonex share price snapshot
Incorporating today’s surge, the Vonex share price has risen more than 190% over the past year and over 400% from its March lows.
Based on the current Vonex share price, the company commands a market capitalisation of around $50 million.
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.