'iiNet's acquisition of TransACT represents an attractive strategic opportunity to build scale in the ACT market quickly and efficiently. In particular, TransACT's experienced and passionate management team will allow iiNet to grow its presence in the SME, corporate and government market segments, a key growth area for the company,' Malone said.
Under the sale and purchase agreement, iiNet will pay $60 million for TransACT, with the acquisition to be 100 percent funded through existing cash and debt facilities.
Completion of the deal is subject to a number of procedural conditions and iiNet says it expects the acquisition to be achieved by the end of this month.
Transact, with operations in the ACT, Queanbeyan and regional Victoria, has 40,000 customers across the residential, SME, corporate and government markets.
TransACT's Chief Executive Officer, Ivan Slavich, said he and his management team were looking forward to being part of the iiNet team and were 'excited about the growth possibilities this presented.'
'It will be great for TransACT, and our partner AtcewAGL, to have access to a leading national brand. iiNet's reputation for excellent customer service and product innovation will be well received by our loyal residential, SME, corporate and government customer base,' Slavich said.
Key aspects of what iiNet's will get when the deal to buy TransAct goes through, include:
'¢ 40,000 highly bundled subscribers across residential, SME, corporate and government market segments using more than 140,000 products
'¢ Strong local brand concentrated in ACT and regional Victoria
'¢ Growing SME, corporate and government customer base with complementary datacentre operation in ACT generating nearly $30m of annual recurring revenues
'¢ 4,500 kilometre network, passing more than 250,000 premises
'¢ Experienced management team with deep commercial relationships in key sectors
'¢ Strong financials - total recurring annual revenue of approximately $80 million and EBITDA of $17 million
'¢ 100% cash and debt'funded
'¢ EPS accretive (pre synergies) for iiNet shareholders, with synergies available from the integration of systems and suppliers.
Malone said iiNet was very enthusiastic about the increased market opportunities that the NBN will bring, and said the company's acquisition of TransACT further strengthens its position.
'Adding 40,000 new customers, including blue'chip corporate and government bodies, as well as strengthening our network and presence in the ACT and regional Victoria, will allow iiNet to further penetrate these key markets and extend our leading customer service and innovative products to a broader audience,' Malone concluded.