nathsgames
Joined: 08 Aug 2007
Posts: 794
Location: GC
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 Posted: Thu May 08, 2008 5:15 am Post subject: iiNet to buy Westnet |
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Holy Crap - if anything I would have thought it would be the other way around....
ASX-listed ISP iiNet is to buy fellow West Australian service provider Westnet for AU$81 million in cash.
The acquisition will bring iiNet closer, in subscriber terms, to Australia's top two ISPs, boasting a total of 685,000 subscribers, 365,000 of which are on DSL. At last count, Telstra counts around 2.5 million Internet subscribers, while Optus counts close to one million.
Privately owned Westnet is currently the nation's sixth largest ISP — employing 560 staff, with 180,000 Internet subscribers, 31,000 telephony customers and 11,000 Web hosting customers. Over half of its revenues are derived from the resale of wholesale ADSL broadband connections provisioned by Telstra and Optus. The company is expecting FY08 revenues of AU$133.6 million, a growth of 32 percent over FY07, and is expecting to post its first net profit after tax of AU$7 million after several years of minor losses.
iiNet chief executive officer Michael Malone said: "Westnet has consistently set the benchmark for service in our industry, and I look forward to learning how we can improve iiNet's service even further."
In a presentation to investors, Malone said that iiNet will retain the Westnet brand and staff. But there will be opportunities for the two brands to cross sell each other's products — Westnet may offer iiNet's naked DSL products, and iiNet may offer Westnet's satellite services to any of its own customers that can't gain access to ADSL.
Funding the acquisition has been a mammoth exercise. It is being raised by iiNet on several fronts — half via a AU$41 million share placement of 25.6 million shares at AU$1.60 per share to Euroz Securities Ltd, the rest in cash and debt. The company's two major shareholders, Amcom Telecom and AAPT, have supported the move.
The acquisition comes at a time of continuing consolidation among Internet Service Providers. In February, listed ISP SP Telemedia (trading as Soul) forked out $150 million for a merger with TPG.
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