iiNet set to complete TransACT purchase?

16 Nov 2011

Alternative Australian broadband provider iiNet has reportedly entered the final stages of a deal which will see it spend up to AUD80 million (USD 81.5 million) to acquire Canberra-based telco TransACT, The Australian reports. It is understood that the purchase, which will cost iiNet between AUD60 million and AUD80 million, will shore up its position as the country’s third largest internet service provider (ISP) behind incumbent Telstra and second-placed SingTel Optus, while the deal would also launch iiNet into the government and corporate services sector. According to the report, financial terms have been agreed for the acquisition, and iiNet is now thought to be completing due diligence. Following the purchase it is expected that iiNet will absorb TransACT’s 80,000-strong customer base, as well as its 300 employees and its fibre assets in Camberra.

As noted in TeleGeography’s GlobalComms Database, iiNet has long pursed an acquisitive strategy, and by the end of 2010 it had consolidated more than 30 ISPs in total. One of the most significant additions to its portfolio came in May 2008, when it acquired Perth-based ISP Westnet, which at the time predominantly resold Telstra and Optus wholesale services, for AUD81 million. In March 2010 iiNet entered into an agreement to acquire Melbourne-based rival ISP Netspace for AUD40 million with the deal to be funded by debt, while more recently, another notable purchase was announced in July 2010, when, after much speculation and several failed sale attempts, Telecom New Zealand divested the consumer operations of its Australian subsidiary AAPT to iiNet. Under the terms of the deal between the two companies iiNet agreed to pay AUD60 million for the business.

Australia, iiNet (incl. Internode), TransACT