Perth-based internet service provider EFTel Ltd has announced its third acquisition in four weeks, this time of Queensland-based ISP Instant Communications.
Perth-based internet service provider EFTel Ltd has announced its third acquisition in four weeks, this time of Queensland-based ISP Instant Communications.
EFTel acquired Osbourne Park-based Ace Online and Queensland-based aaNet in July.
All three acquisitions are cash deals worth a maximum total of $2.47 million, which will be primarily funded by the Westpac acquisition facility announced by EFTel earlier this year. The exact amount payable for the deals is contingent upon performance outcomes.
The acquisition of Instant Communications adds 3,000 active dial-up and broadband accounts, predominantly in Queensland.
EFTel chief executive Simon Ehrenfeld said the deal would provide a immediate boost to earnings, and that the company was still reviewing additional acquisition opportunities. This deal would tie in well with the aaNet acquisition.
"Both are based in Brisbane and the rapid merger of cost bases there is already well under way. All recent acquisitions have provided the company with additional growth opportunities, through cross selling of EFTel products, as well as new economies of scale," he said.
EFTel shares closed up 18 per cent today at 6.5c each.
The full text of an announcement from EFTel is pasted below
EFTel Limited (ASX: EFT) has acquired Queensland based ISP Instant Communications.
EFTel has continued to grow its active account numbers. This is the third ISP acquisition announced in less than one month. EFTel recently acquired the aaNet group, one of Australia's fastest growing broadband communications providers, and Ace Online, a WA based ISP with a mix of retail and business customers.
All three acquisitions are cash deals worth a maximum total of $2.47 million, which will be primarily funded by the Westpac acquisition facility announced by EFTel earlier this year. The exact amount payable for the deals is contingent upon performance outcomes.
The acquisition of Instant Communications adds 3,000 active dial-up and broadband accounts, predominantly in Queensland.
EFTel CEO Simon Ehrenfeld said today, "As part of our well-established growth strategy we have recently acquired three ISPs that have increased our active account numbers by over 20,000. This will provide an immediate boost to earnings."
The recently announced acquisition of aaNet almost doubled the broadband customer base to around 40,000, growing EFTel's total to 140,000 active accounts. With turnover approaching $10 million p.a., aaNet was EFTel's largest ever acquisition in both revenue and broadband customers.
"Instant Communications ties in well with the aaNet acquisition. Both are based in Brisbane and the rapid merger of cost bases there is already well under way. All recent acquisitions have provided the company with additional growth opportunities, through cross selling of EFTel products, as well as new economies of scale," Mr Ehrenfeld said.
"EFTel believes consolidation of the Australian ISP industry will continue because this is a business in which scale brings greater profitability. We are well-placed to take advantage of consolidation within the industry, having the resources and the processes to ensure secure and profitable acquisition activity."
"EFTel is currently reviewing a number of additional acquisition opportunities throughout Australia and with a dedicated integration team, believes each new acquisition can be rapidly and smoothly integrated into our business in a way that generates immediate financial benefits," said Mr Ehrenfeld.
