Eftel positions for NBN with Engin acquisition
- 24 September, 2012 14:18
Eftel agreed to pay $9.1 million to buy VoIP provider Engin. The acquisition is “strategically very important to Eftel” as the company looks to take advantage of the NBN, according to Eftel CEO Scott Stravretis.
As the NBN is deployed across Australia, VoIP will be “used to deliver traditional fixed line voice calls,” Stravretis said. “The VoIP scale and experience acquired under this transaction will greatly assist the Eftel business as the industry undergoes this technology change."
The deal includes Engin’s customer contracts and intellectual property. Engin had revenue of $20 million in fiscal-year 2012, mainly from the sale of consumer, business and wholesale VoIP services. Engin has 85,000 VoIP services in operation. It also sells ADSL broadband, PSTN telephony and mobile services.
Eftel expects the business will contribute more than $2.5 million to its EBITDA for the year, after restructuring costs estimated at $0.8 million. Eftel will pay for the acquisition from $9 million in new debt, it said.
“This acquisition is value accretive for Eftel shareholders,” Stravetis said. “It is consistent with the Board’s stated objective of taking a cautious and measured approach to borrowings when adding earnings and cash flow accretive acquisitions, as Eftel continues to build its portfolio of synergistic profit generating assets.”
Eftel didn’t say when it expected to complete the deal or what approvals may be required.
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