M2 Telecom subsidiary, People Telecom, has announced the acquisition of Bell Networks for just over $4 million.
As part of the deal, M2 will pay $4.015 million for Bell's small to medium business (SMB) customers' contracts and assets. Further payment may be considered based on the performance in the first year after acquisition.
The deal will provide M2 with assets relevant to its SMB target market, also providing customers for M2's products, and is expected to generate around $13 million in recurring customer revenues.
Bell's assets are expected to deliver earnings (before interest, tax, amortisation and depreciation) of around $2 million per year.
Subject to conditions, the sale of Bell Networks will be completed by 1 August 2010.