Tel.Pacific and gotalk to merge
- 19 December, 2011 09:58
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Telecom service providers Tel.Pacific (ASX:TPC) and gotalk are to attempt a merger following a deal announced to the Australian Stock Exchange (ASX) today.
Under the merger – which will shortly be put to shareholders, and which is being recommended by gotalk board members — Tel.Pacific will acquire all outstanding shares in gotalk.
According to a Tel.Pacific ASX statement, current gotalk chief executive officer, Steve Picton, and current chief financial officer, Ian Solomon, are expected to join the Tel.Pacific board providing advice and expertise.
“Steve and Ian will also both assist with the integration and transition of the businesses as executive directors for at least the initial period of the merger, and have defined areas of responsibility which will see a great deal of relevant expertise directed immediately to where it can most benefit the combined group,” the statement reads.
The statement also notes that despite gotalk making a net profit after tax loss of just more than $1 million off an EBITDA of $601,000, the company’s presence in the calling card market and the international pre-paid mobile market compensated for its financial performance.
“The boards of both companies believe there is an excellent opportunity to benefit from each company’s areas of specialisation to strengthen the combined business and create both cost and revenue synergies,” the statement reads.
In March this year, Tel.Pacific said it expected a return to profit for the rest of the year, after swinging to a $368,000 loss in the first half.
In November last year, the company said it anticipated a small net loss in 1H11, due to extensive investment in the company's new pre-paid mobile product Hello Mobile.
In March last year, gotalk slammed the Australian Communications and Media Authority (ACMA) over a law suit taken against it for breaches of the Do Not Call Register Act.
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