iiNet acquires Melbourne ISP

PERTH-BASED internet service provider and junior telco iiNet has signed an agreement to acquire the internet service component of Melbourne-based Virtual Communities Limited.

While the cost of the acquisition is undisclosed, it has been reported elsewhere as being between $7.5 million and $9 million.

In a statement announcing the deal, the company said “the purchase price for the subscriber base was comparable to iiNet’s previously acquired Australian customer bases.

“The consideration is 100 per cent cash and will be funded by iiNet’s existing financing facilities.

“As with previous acquisitions, it will take approximately six to seven months for Virtual Communities to be fully transitioned onto the iiNet network and delivering earnings comparable to the rest of iiNet business.

The acquisition will add 50,000 dial-up subscribers and approximately 2,500 broadband residential and business customers to iiNet’s customer base. It will boost total customer numbers to more than 400,000.

The deal, due for completion on October 5, is the latest in a string of ISP acquisitions by iiNet.