WA-based ISP, EFTel has acquired broadband provider, aaNet, in its largest ever deal.
The purchase will add 40,000 national broadband subscribers to its books, boosting total subscribers to 140,000. It will also add about $10 million in annual revenue.
CEO, Simon Ehrenfeld, said EFTel had worked closely with Telstra to manage the process.
In an ASX statement, he said last-minute negotiations had saved the deal from collapsing.
The transaction would help EFTel, formerly known as Datafast, become one of Australia's largest broadband providers, Ehrenfeld said.
The aaNet acquisition is one of several made by EFTel during recent years to expand its customer and services base. Recent purchases include VianetAIP and MyAccess. The acquisition also comes after EFTel's failed merger attempt with Perth-based ISP, Chariot, in September. The pair had been in discussions since July 2004.
aaNet provides residential and business-grade ADSL broadband and VoIP services. The ISP announced it was in talks to sell the company with an unnamed party in December. The deal was expected to be finalised in May.
But the company has also had its own troubles, having been the subject of legal disputes with modem vendor, NetComm, and ISP, Exetel.
Despite these concerns, independent telco analyst, Paul Budde, said the business was a good match with EFTel.
He said aaNet's weakened state had made it a bargain buy.
"Data costs and the failed Chariot acquisition had left EFTel with some problems, and it has been out the running because of these troubles," Budde said.
"It's good to see the company back in the race and following the trend of consolidation, which is still much needed in the industry."
"Broadband was one area where EFTel had to improve and aaNet has very good numbers there."
According to Budde's 2005 statistics, EFTel ranked as Australia's eighth largest ISP in dial-up subscriber numbers but was 17th in broadband.
Ace buyout adds business customers
Hot on the heels of its aaNet acquisition, EFTel has picked up WA-based ISP, Ace Online, for an undisclosed sum.
Although the deal was significantly smaller in size, CEO, Simon Ehrenfeld, said the majority of Ace users were in the lucrative business market. EFTel's business customers now accounted for nearly half of its revenues, he said.
The company would also relaunch its xDSL-based business products shortly in an effort to boost subscriber numbers.
"The deal is about getting a large number of business users onboard," Ehrenfeld said. "It is getting more competitive in that space, so we'll be offering new pricing."