iiNet (ASX: IIN) has confirmed reports that a voluntary suspension of its shares on 18 November was actioned in order to acquire Canberra-based telecommunications company, TransACT.
The internet service provider (ISP) has purchased the company for $60 million. TransACT has annual revenues of $80 million and earnings before interest, tax and amortisation (EBITDA) of $17 million. It also operates a data centre operation in ACT generating annual revenues of $30 million.
TransACT’s offices are based in ACT, NSW and Victoria, with 40,000 customers across residential, small and medium enterprises (SME), corporate and government market segments.
iiNet chief executive officer, Michael Malone, said in a statement that the acquisition was consistent with its strategy of building scale through consolidation, particularly in the ACT.
“We are also excited about the strong existing relationship between TransACT and ActewAGL, a utility provider in the ACT region, and the resulting growth opportunities for both companies,” he said.
“In addition, TransACT will provide iiNet with the opportunity to deliver super‐fast broadband services in the region similar to our recently launched National Broadband Network [NBN] plans.”
Announced in September, the ISP will offer three NBN plans with different data quotas, ranging from the entry-level, $49.95 plan with 40GB per month (20GB on-peak, 20 GB off) to one terabyte.
He added that the acquisition would be 100 per cent funded through existing cash and debt facilities. It is expected to be complete by 30 November 2011.
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