iiNet has announced that it will acquire rival South Australian internet service provider (ISP) Internode for $105 million.
Michael Malone leaves no mountain unscaled. (Credit: iiNet)
The company announced the acquisition in a press release ahead of a conference call with journalists at 4.30pm today.
iiNet CEO Michael Malone said that the acquisition of the company, which was founded by Simon Hackett, would allow iiNet, already the number-two DSL broadband provider, to grow into South Australia, and further in eastern states.
iiNet's chief executive officer, Michael Malone, said that the acquisition strengthens the company's position as the leading challenger brand and "the new number-two provider" of DSL broadband.
"Internode is a successful company with an impressive reputation," said Malone in a statement. "The two companies are clearly a good fit with their strong cultural alignment, industry-leading customer service and shared commitment to innovation."
Internode will remain separate from iiNet, under the leadership of Hackett, who said that the merger will allow the companies to increase their national presence.
"We have highly compatible business approaches, unrivalled excellence in innovation around networks, technology and content and we gain the obvious benefits of substantially increased scale. The transaction will cement a strong and sustainable future for Internode, our staff and our customers nationally".
Internode currently has 190,000 broadband subscribers and 260,000 active services, and is expected to have a pro forma revenue of $180 million in financial year 2012.
In handing over the keys to iiNet, Hackett receives 12 million shares, or 7.5 per cent of iiNet. The deal is set to be completed by 29 February 2012.
Internode started business in 1991, founded by current managing director, Simon Hackett, who previously worked at the University of Adelaide, helping to build the South Australian component of AARNet, the network hooking up educational institutions across the nation.
Internode grew through the years, opening a corporate head office in 2003 and gaining its 100th employee in 2004. It was the first Australian ISP to deliver ADSL2+. It now has over 430 employees.
Founder Simon Hackett has always been outspoken, saying exactly what he thinks, not only about incumbent telco Telstra, but also about the National Broadband Network (NBN), being the prime mover behind a Connectivity Virtual Circuit pricing change for the new national network.
Simon Hackett with his baby, Internode. (Credit: Internode)