Primus sold to M2 for $192 million
Primus Australia's parent PTGi has announced that it will sell the company for $192.4 million to M2 telecommunications.
PTGi said that the sale had come out of a review conducted by a special committee of the board of directors, which was established to value strategic alternatives to increase shareholder value.
Primus recently had a leadership change, replacing long-serving CEO Ravi Bhatia last August with newcomer Tom Mazerski.
In the past few months, Primus has announced a number of big contract wins. In January, Primus won a three-year multimillion-dollar deal to provide Payless Shoes' network, and the company also secured a $6 million deal to provide voice, data and managed Wi-Fi services for Hungry Jack's. Earlier this month, the company revealed that it had been signed to provide a voice and data network for energy retailer Australian Power and Gas.
These wins have been a result of selling the benefits of Primus' fibre backbone network, which reaches 66 cities across Australia, according to Mazerski.
Primus has around 165,000 residential, SMB and wholesale customers, and a team of 500 employees. In the 2011 calendar year, Primus achieved $280.2 million in revenue.
There has been a high level of consolidation in the telecommunications industry in recent years, with iiNet going on an acquisition spree and telcos shoring up customer numbers in preparation for the roll-out of the National Broadband Network (NBN).
M2 has recently bought a number of telecommunications companies and customers, including mobile services reseller eDirect, Time Telecom's SMB customers, 15,000 Austar mobile customers, Bell Networks and People Telecom.
M2 also saw a change in leadership last August, as founder Vaughan Bowen stepped down in favour of then COO Geoff Horth.
Horth said that the two companies would be able to build on each others' strengths.
"The introduction of the Primus suite of next-generation services, along with the skilled and passionate team, will ensure our sales teams are armed with the latest managed/hosted service offerings to meet the needs of current and prospective customers. On behalf of the company, I look forward to welcoming the Primus Team and customers to the M2 Group," he said in a statement.
PTGi also decided to make changes to Primus Canada, separating it into two businesses — a datacentre business and a telco business. It said that the special committee would continue to look at strategy, which could include a sale or merger for the company.
The transaction is expected to close by June.