M2 Telecommunications has bought the contracts and records of 30,000 small- and medium-sized business customers from Time Telecom for $18.35 million.
The payment is to be made over three tranches, with the first to be paid upon completion of the deal, and the second and third tranches to be paid six and nine months, respectively, after completion next week if minimum performance milestones are met.
"We are extremely pleased to have acquired the Time Group customer base. We have worked closely with the owners of Time Group for several years through our M2 Wholesale division, during which time we have seen their business grow in both scale and operational maturity," M2 CEO Geoff Horth said in a statement.
"The transaction has appeal to M2 for a number of reasons, most notably that the assets will contribute to earnings for the 2013 financial year and were acquired for less than three times annual [earnings before interest, tax, depreciation and appreciation], consistent with the purchase price of this nation."
Since most of the contracts were single product customers, there would also be a high opportunity for cross selling, the company said.