TransACT announced today that iiNet has entered into a binding agreement to buy the Australian Capital Territory-based telco for $60 million.
"This acquisition will deliver significant network assets, while increasing iiNet's presence in the ACT and regional Victoria. This move will also accelerate our penetration into the small business, corporate and government sectors, a key strategic focus for us," iiNet CEO Michael Malone said. The sale is expected to be completed by 30 November.
With the acquisition, iiNet will be gaining 40,000 residential, small business, corporate and government customers, who are using over 140,000 products.
TransACT's network, including fibre-to-the-premise components, covers 4500 kilometres, passing 250,000 premises. It will also gain a datacentre operation in the Australian Capital Territory, which generates nearly $30 million in annual revenue.
Ivan Slavich, TransACT chief executive officer, said that the purchase is a good fit.
"We have much in common with iiNet. We both started small, challenged the bigger guys and built quality networks to even out the playing field. Our mutual success is built on the back of quality products and services, and a commitment to customer service excellence, which is the envy of our competitors."The purchase had been expected after a report in the Australian Financial Review predicted the sale, and iiNet entered a trading halt — iiNet has already been on the acquisition path, picking up Westnet, Netspace and AAPT's consumer division in the past few years. However, it may not have escaped acquisition attempts itself, with TPG recently purchasing just under 5 per cent of iiNet.
TransACT was started over 10 years ago as an offshoot business of Actew. Actew Corporation owns 18 per cent of the company now.
TransACT was advised by Deloitte Corporate Finance and Clayton Utz.