ITWire

The agreement will see $2.1m of additional cash equity injected by the new shareholders and the ClubTelco business valued at $7.5m. Post-transaction the vendors of ClubTelco and new shareholders will hold approximately 75.6 percent of the equity in Eftel leaving the existing shareholders of Eftel with the remaining 24.4 percent.

ClubTelco is owned by the founders and directors of Dodo, which supplies it with wholesale services. It and Eftel are of comparable size. According to Eftel, ClubTelco delivers around 60,000 services, including ADSL, fixed line telephony, VoIP, mobile broadband, mobile telephony and generates approximately $28m annual turnover, and the transaction will see Eftel double in size to 120,000 active services and annual turnover in excess of $55m.

Dodo CEO Larry Kestelman, said: "The two businesses together constitute sufficient scale to compete effectively in the market. We are really excited by the possibilities this deal presents."

Eftel has given service numbers for the merged entity at 120,000 but has not revealed customer numbers. Eftel has long claimed to be a "top ten" ISP. According to figures given by iiNet in its half year results presentation in February, the merged entity might make eighth position in DSL provider rankings. iiNet listed the top seven by DSL subscriber numbers as being Telstra 2.4m, iiNet 0.65m, Optus .56m, TPG.51m, Internode .19m and Primus .14m.


Eftel brings to the deal a substantial DSLAM network: it has close DSLAMs in close to 400 exchanges and claims to have one of the largest competitive ADSL2+ footprints in Australia. The combined entity will employ more than 300 staff located across offices in Manila, Kuala Lumpur, Melbourne, the Gold Coast and Perth.

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