DATA communications and Internet provider Swiftel Limited has announced its intention to merge with privately owned voice services company, people telecom, in a scrip deal worth an estimated $50 million.
DATA communications and Internet provider Swiftel Limited has announced its intention to merge with privately owned voice services company, people telecom, in a scrip deal worth an estimated $50 million.
Under the reverse takeover, Swiftel will issue up to 420 million shares to acquire people telecom and will transfer 64 per cent of the issued capital of the merged entity on a fully diluted basis to people telecom shareholders.
In a stock exchange statement, Swiftel indicated people telecom’s shareholders will be issued between 386.2 million and 419.4 million shares for the company. Based on a share price of 12 cents, the business could be valued at up to $50.3 million, although an exact figure would be determined by the share price of the company on the day the deal is approved.
The new company will be headed by current people telecom CEO Ryan O’Hare, while Swiftel’s CEO Chris Gale, who has been dealing with the recent failure of his private business interests, will step down from the board to become people telecom’s director of data services.
Following the completion of the deal, which is subject to shareholder approval and expected to be completed in May, people telecom’s Barry Hamilton, Ryan O’Hare and Brendan Fleiter will be appointed to the board. All current Swiftel directors will retire. with the exception of Colin Marland, David Vilensky and Malcolm Dick.
In a statement to the stock exchange, Swiftel said the new people telecom would create one of Australia’s largest full-services telecommunications groups and would have more than 30,000 business and consumer customers across Australia.
Swiftel said the merged entity would produce an operating profit in the fourth quarter of 2003-04 and expected to generate revenue of more than $110 million in its first full year (2004-05).
The new company would be renamed people telecom and would be headquartered in Sydney, however the Swiftel name would be retained for use on consumer services including DSL, mobile and voice.
In the statement, Mr O’Hare said the new entity would “continue to deliver innovative customer services and pricing to a customer base that is spread across all market segments from large corporations to individual consumers”.
“The deal will enable each merging company to leverage its respective product offerings to its existing customer base in order to maximise revenue growth and deliver cost savings from economies of scale,” he said.
Sydney-based Swiftel, which originated in Perth, owns high bandwidth fibre networks and targets business, government and residential broadband customers. It has more than 18,000 customers nationally with a product offering that includes broadband ADSL services, high-speed managed services, data storage and fixed line and mobile voice services.
“ ... continue to deliver innovative customer services and pricing.”
- Ryan O’Hare
