Perth-based ISP iiNet has acquired the FlowCom ISP business for $6.3 million in cash.
iiNet had halted trade of its shares on the Australian stock exchange Wednesday morning, pending an announcement on Friday.
However, an email from FlowCom receivers, PricewaterhouseCoopers (PWC), to FlowCom staff obtained by IDG on Wednesday afternoon revealed that at 3.30am Wednesday morning, PWC signed a contract to sell the FlowCom ISP business to iiNet Limited.
FlowCom’s ISP businesses include the Flow, Froggy, iGreen ADSL and Planet ISP brands.
Despite several ISP acquisitions throughout 2003, FlowCom Limited was placed into receivership last month. The receivers, PWC, put the company on sale shortly afterwards.
Statements made by PWC on behalf of FlowCom to the ASX earlier this month declared 22 parties had made non-binding offers on the company by February 11.
According to the FlowCom internal email, the sale to iiNet followed “a very competitive sale process”.
“We were still negotiating with two parties [including iiNet] until about midnight last night,” PWC said in the email.
In the original staff email, iiNet was expected to retain the majority of staff currently working for Flow and its subsidiary Froggy – around 55 in total.
In a second email to staff yesterday afternoon, this figure was adjusted to Froggy employees plus 14 FlowCom staff.
"All Froggy staff are being offered continued employment. There are also 14 non-Froggy staff that will be offered continued employment. Your team leader will inform you today if you are to be offered a position. There will be formal letters circulated before the end of the week," the second email states.
FlowCom and iiNet will also sign an agreement to ensure all current FlowCom staff are retained for "a minimum of 90 days".
Commenting on the sale in the initial staff memo, PWC administrator, Phil Carter, said he was particularly delighted that such a good result had been achieved.
“This is a positive and significant outcome for everyone connected with FlowCom as it provides employment prospects for a large number of staff and puts significant cash into Flow Communications,” he said.
“It will also allow us to focus our efforts on selling the remaining parts of Flow Communications and assisting the director of MacroCom [a subsidiary of Flow] in closing a sale for that part of the business.”
In a statement to the ASX Wednesday, iiNet managing director Michael Malone said the deal will bring an additional 35,000 Internet users into the iiNet fold, lifting its total to around 350,000 subscribers.