Internet service provider iiNet has halted trading of its shares as it prepares to release information about an acquisition that would be material to its business.
Michael Mallone (Credit: iiNet)
The company did not provide any further information in its announcement this morning, however several weeks ago it acknowledged it was in talks to acquire Melbourne-based ISP Netspace — but also that it had held discussions with other parties.
The Australian Financial Review, which broke news of the potential deal, reported it could be worth between $60 million and $75 million. However iiNet noted the prices being discussed were a long way below those figures. Today it said it expected to lift its trading halt within two days.
Netspace was founded in 1992 by its current managing director Stuart Marburg, and technical director Richard Preen, while iiNet is led by chief executive and founder Michael Malone.
Currently Netspace has around 80,000 customers Australia-wide. It has historically had a strong presence in Melbourne — as compared to iiNet’s historical roots in Perth — and also in Tasmania. It is not listed for public trading but is privately held.
Netspace is one of a clutch of companies which also includes iiNet, TPG, Adam Internet, Amcom and iPrimus that make up the second tier of major players in the Australian telecommunications landscape.
iiNet and TPG particularly have a history of acquisitive behaviour. Among iiNet’s major acquisitions include the buyout of fellow Perth-based ISP Westnet, while TPG merged with Soul in 2008 and subsequently is in the final stages of acquiring wholesale fibre backhaul player Pipe Networks.