Western Australia-headquartered Amcom Telecommunications (ASX: AMM) will acquire internet protocol communications provider, IP Systems in a deal worth $6.5 million.
The privately owned IP Systems provides voice, video and data solutions around Australia and New Zealand on a fibre optic backbone network.
In a statement to the ASX, Amcom said the deal, which is subject to regulatory and shareholder approval, would extend the telco's product range into enterprise voice solutions.
“This gives us the potential to significantly increase Amcom’s share of our customers’ spend on telecommunications services," Amcom CEO Clive Stein said in the statement.
“The acquisition also provides opportunities for Amcom to extend its market footprint, with an Amcom office now in most major capital cities. This means Amcom can better serve the needs of national customers and grow our business."
Stein added acquisition is expected to contribute $12 million in revenue.
Amcom will pay an initial consideration of $5.3 million in cash and $0.30 for 4.1 million IP System shares. Further consideration will depend on profitability levels achieved by IP Systems between 1 July 2009 and June 2012, the statement reads.
Once the deal is approved, IP Systems will operate as a wholly owned subsidiary of Amcom.
Earlier this month, the Northern Territory Government signed Amcon to extend its existing Darwin and Alice Springs fibre networks to provide data carriage services to the Territory’s agencies and schools.
The deal, initially worth $20 million over five years, will see Amcom establish a Darwin office in order to service the contract as well as pursue additional business in the Territory.
Amcom was also recently short listed in the innovation category of the Australian Computer Society WA Branch's 19th Annual Western Australian IT and Telecommunications Industry Awards (WAITTA) for its ‘Amcom Internet Standby’.