23/08/2006 - 16:09

Fone Zone to acquire Communiqué for $6m

23/08/2006 - 16:09

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Mt Lawley-based mobile phone retailer Communiqué will be acquired by Queensland-based mobile phone retailer Fone Zone Ltd for $6 million.

Fone Zone to acquire Communiqué for $6m

Mt Lawley-based mobile phone retailer Communiqué will be acquired by Queensland-based mobile phone retailer Fone Zone Ltd for $6 million.

According to an announcement from Fone Zone, the purchase price represents approximately 3.6 times Communiqué's 2006 EBIT, and will be funded from the company's cash reserves.

 

The full text of the announcement is pasted below


Fone Zone Group Ltd, Australia's largest specialist mobile communications retailer, today signed an agreement to acquire Communique, Western Australia's leading independent mobile phone retailer and Telstra's sixth largest dealer nationally for AUD$6 million in cash.

Fone Zone is the largest Telstra Premium Mobile Dealer and will reinforce its strong market position with the integration of 15 Communique stores, taking Fone Zone's store network to 27 in Western Australia and approaching 150 nationally.

Fone Zone has a solid track record of integrating acquisitions and driving additional value through it's unique retail business model and customer focus. By migrating previously acquired stores to Fone Zone operating systems and incentive plans the group has been able to rapidly increase margins from those acquired stores to Fone Zone group-wide levels.

With the Communique acquisition, Fone Zone will have added 81 stores to its network in eight transactions since 2000 in addition to its organic growth.

The purchase price represents a multiple of approximately 3.6 times FY2006 EBIT and will be funded from cash reserves. The acquisition is expected to make a positive contribution to Fone Zone earnings in the coming financial year.

Communique commenced operations in 1987 and has built a network of 15 stores with more than 50 staff in Western Australia.

The Fone Zone Group has a sales network approaching 150 stores across all of Australia's major metropolitan and regional areas; 5 Telstra licensed stores; more than 30 nominated dealers; 4 state based outbound business teams and inbound and outbound call centres. Fone Zone is exclusively aligned with Telstra Mobile as a Premium Dealer.

Fone Zone's Chief Executive Officer, Mr David McMahon, said "Our ability to generate additional value from acquired businesses by introducing our retailing and customer service skills has been one of the major drivers of Fone Zone's growth."

"Communique is a great opportunity for Fone Zone because it has similar customer service culture to ours and WA is an increasingly important market because of its strong economic growth" Mr McMahon said.

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