iiNet acquires rival ISP Netspace for AUD40 million

29 Mar 2010

Australian alternative broadband provider iiNet has announced that it has entered into an agreement to acquire rival ISP Netspace for AUD40 million (USD36.15 million) with the deal to be funded by debt, the Sydney Morning Herald reports. Melbourne-based Netspace has approximately 80,000 business and residential customers, and it is thought that iiNet’s decision to purchase the operator has, in part, been prompted by a desire to shore up operations in Tasmania and Victoria. At present iiNet has just one DSLAM in Tasmania, but on completion of the Netspace acquisition this figure will rise to twelve. Initially it is understood the Netspace brand will be retained, and will continue to operate as a separate entity. iiNet has, however, said it expects to realise significant potential savings through the migration of Netspace customers to iiNet’s network and through lower bandwidth costs, suggesting it could save up to AUD2 million in the first year of ownership, rising to AUD5 million the following year. Commenting on the development, Michael Malone, iiNet’s CEO, said: ‘This acquisition will bring [us] closer to our target of 15% market share in the fixed line broadband market prior to the commencement of the National Broadband Network (NBN). Netspace is a natural fit for iiNet given the strong alignment of the company’s products, networks and cultures. It is a great business, having grown strongly in the residential market, and has a loyal customer base given its customer service focus.’

Australia, iiNet (incl. Internode)