Engin established Australia's first commercially available VoIP service in Australia in 2004. Seven, the majority shareholder of Engin, made two attempts to buy out minority shareholders. The first in December 2010, which was later cancelled. It announced the sale to Eftel without comment.
According to Eftel, Engin had revenues in excess of $20m in FY12, predominately through the sale of VoIP services to consumer, business and wholesale customers and over 85,000 VoIP services in operation. The business also sells ADSL broadband, PSTN telephony and mobile services.
In a statement to the ASX Eftel said: "The full year annualised underlying EBITDA contribution of the business to Eftel is expected to be over $2.5m, after expected one-off restructuring costs of approximately $0.8m." Eftel said it would fund the acquisition primarily from new debt of $9m.
"Not only does the acquisition of Engin provide immediate benefit to shareholders, this transaction is also strategically very important to Eftel. As the National Broadband Network (NBN) rolls out across the county, VoIP will be the solution used to deliver traditional fixed line voice calls. The VoIP scale and experience acquired under this transaction will greatly assist the Eftel business as the industry undergoes this technology change."