M2 telecom has achieved huge growth in recent years through a string of acquisitions but every one to date has been a reseller of services on the networks of other telcos.
Primus Australia, on the other hand operates a network of 290 DSLAMs, its own fibre network in the major cities, its own voice switching network and almost 10,000 square metres of data centre facilities in Melbourne and Sydney.
M2 however, appeared to play down Primus' infrastructure in its announcement of the acquisition.
M2 CEO, Geoff Horth said: "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."
In its announcement to the ASX, M2 said:
"M2's acquisition of Primus is a strategic and highly complementary transaction which, in addition to adding significant scale, will contribute next generation sales and support capability, ensuring that M2 is well prepared for the opportunities presented by the deployment of the National Broadband Network (NBN).
"The primary assets of Primus include:
- approximately 165,000 customer contracts, comprising a mixture of residential, small and medium business, corporate and wholesale customers, adding significant scale to the M2 Group;
- the well-recognised and trusted iPrimus and Primus brands;
- a highly skilled an passionate team of approximately 500 people including the long-serving and experienced management team; and
- the national Primus network including data centres and metro fibre rings, providing the capability to sell and support next generation cloud based services."
The Primus acquisition will more than double the M2 headcount, which currently stands at about 450. It is not known how much in the way of redundancies will be announced.
In addition, in the eyes of the M2 board at least, the lion's share of the value of the global Primus company must be in Australia. The NYSE market capitalisation of Primus Telecommunications Group Inc. (PTGI) is US$231 million, compared to approximately US$200 million paid by M2 for the Australian operations.