The move is likely to upset iiNet. The similar domain name to that of Westnet (www.westnet.com.au) in the hands of a major player like Eftel (which has about 120,000 customers and which also operates the Club Telco brand) has the potential to create much more confusion than when the name was owned by the much smaller West Australian Networks.
Eftel CEO Scott Stavretis said: "Whilst this is a modest transaction in size, it was purchased on a post synergy annual EBITDA multiple of less than 1.5 which represents immediate value to our shareholders, together with further opportunity to cross-sell into the loyal business customer base."
Eftel said the transaction would be completed on 2 July 2012, with consideration to be paid by way of cash instalments.
For the half year to 31 December 2011, Eftel reported a loss of $3.1m, up from $0.42 m for the same period in 2010. Revenue doubled from $13.5m to $28.3m following the merger of Eftel and Club Telco.