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Commander's SMB operations sold

Commander's SMB operations sold

ASX-listed telco, M2 Telecommunications Group picks up Commander's SMB assets and branding

Commander’s SMB assets and intellectual property have been picked up by ASX-listed telco, M2 Telecommunications Group (ASX: MTU), for $19 million.

In August last year, crippling debt and pressure from its creditors pushed the ASX-listed integrator, Commander (ASX: CDR), into receivership. Receivers, Peter Anderson, Chris Honey and Joe Hayes of McGrath Nicol, were then appointed by the company's lenders to the entire organisation and its affiliate companies.

In a statement to the ASX, M2 said the latest deal to involve the fallen integrator was a “major strategic coup” that would add more than $100 million in annual revenue from fixed line, mobile and data services along with the Commander brand, taking the telecommunications group revenue to more than $360 million.

M2 CEO, Vaughan Bowen, told ARN the telco entered into negotiations with the receivers about six weeks ago, after the sale of Commander’s telco assets to the newly formed Commander Telecom Group (CTG) collapsed. According to ARN sources, at the time the receivers were unable to secure a commercially agreeable arrangement between the CTG consortium and Commander’s key suppliers.

“It’s a great brand with a great reputation, it just needs to be given some loving,” Bowen said. “We are only taking the small and medium business of Commander. So its enterprise business and its network operations is not something that M2 is acquiring.”

M2 has now acquired all Commander and related entity SMB contracts, the Commander brand, other Commander trademarks – including Australia Star, Call Australia, Newtel and others – and all the integrator’s operating systems, software, plant and equipment, but not its network infrastructure.

An Adelaide-based customer operations centre and a number of employees will be retained. The telco also committed itself to working with Commander’s established sales and service network, while the existing Commander management will be retained to continue running the operation.

“We are taking on a large number of people but those numbers are something we are still working through the final details of, and it is obviously a first priority when we talk to the team,” Bowen said.

“In the course of this week the staff and franchisees will be communicated to in some detail and we have obviously had a lot to do with the executive branch of Commander through the process.

“We have every intention to fully engage with the people we are bringing into the fold and the franchisees that have been looking for direction, we certainly intend to give it to them.”

While the Commander brand has taken a beating with the equity markets, with small businesses Commander is “still a respected and trusted brand” in Bowen’s view and the deal matches M2’s services and target market while also widening the telco’s channel play.

“It provides us with a absolutely iconic brand, it has great reputation and respect in the small business community. It supplies us with a really effective channel to market because the Commander Centre network has a really large base of established small business relationships.”

The first piece of the beleaguered integration giant, Commander, was sold-off to ASX-listed provider, CSG (ASX: CSV) last year.

The Northern Territory-based integrator acquired Commander’s managed services business including its Federal Government Group 8 and South Australia IT panel contracts.

In May, EDS won the first deal to come out of this Group 8 arrangement with a $96 million contract with the Department of Agriculture, Fisheries and Forestry (DAFF) to provide managed IT services.

In December, 2008, ASX-listed services provider, Hyro (ASX: HYO), also picked up select Commander managed services contracts worth about $3 million per annum.

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