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Telecommunications Commander sells Unitel business to M2 Telecom
Telecommunications Commander sells Unitel business to M2 Telecom | Commander sells Unitel business to M2 Telecom |
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| by Stuart Corner | |
| Monday, 04 February 2008 | |
  
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Unitel is also a distributor of Polycom videoconferencing products, but this function and the related product inventory have been excluded from the deal: M2 CEO, Vaughn Bowen, said his company had decided they were not core to its business. Commander acquired Unitel in 2001. It operates as a separate incorporated entity but Commander gave no indication of its performance in its 2007 annual report. Commander CEO, Amanda Lacaze, said: "This transaction will not only benefit Commander's balance sheet, it will also provide recurring network revenue, consistent with our turnaround strategy. Additionally, it is a great result for our Unitel team which now has the opportunity to be part of M2's core wholesale business." Bowen said: "We first approached Commander about Unitel during the data room process and are very pleased to have reached an agreement that provides continuity of services as well as substantial growth opportunities for Unitel's customers and staff. We believe Unitel is the ideal business to round out our wholesale product suite." He added: "Several members of the Unitel team are long serving and will now be provided with a broader career path within our strongly expanding M2 wholesale business. For Unitel's customers, many of which are also long standing and loyal, it will be 'business as usual', with the difference being that customers will now have a far wider wholesale product suite to choose from, additional technical and account management resources together with the assurance that Unitel is now owned by a company which regards wholesale network services as core business." Unitel will fund the acquisition with a combination of cash reserves and bank debt. In an announcement to the ASX it said: "The acquisition of the Unitel network services business is a highly strategic step for M2's fast growing network wholesaling business, providing a sizable expansion to its wholesale customer base and access to certain unique intellectual property used by Unitel in the supply of Local Access Resale services and other core telecommunications network services. "The Unitel acquisition and its integration into M2's wholesale business unit is forecast to be substantially earnings accretive for M2. M2's consolidated earnings per share is expected to increase by close to 50 percent or 2.9 cents per share (on an annualised basis), on approximately $37 million in additional annual revenue, taking M2's annualised revenues beyond $140 million." |
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