Telecommunications services provider, M2 Telecommunications, has purchased the business assets of business telecommunications services provider, Clear Telecoms.
The asset purchase includes customer contracts, operating systems, brands and other related intellectual property.
The transaction involves a net cash consideration of $24.5 million for the assets, payable over three payment tranches.
The first will be payable immediately, with the remainder to be paid in September 2011 and March 2012.
A variable bonus consideration may also be payable in the event that specific performance milestones are exceeded.
Clear Telecoms services about 20,000 SMBs across the country, and generates recurring revenues of about $70 million.
M2 will keep all senior Clear operation management on-board and has also extended offers of employment to other employees, adding about 40 staff to its books. M2 employs more than 400 staff nationally.
With the purchase of Clear assets, M2’s group revenue is expected surpass $500 million per annum and it anticipates Clear assets to contribute $8 million in earnings before tax for the 2012 financial year.
“The addition of the Clear business to the M2 Group is another extremely positive step in further expanding our presence in the SMB telco market,” M2 managing director and CEO, Vaughan Bowen, said.
“We see considerable opportunity to add further value to existing customers and in doing so, expand both Clear’s revenues and earnings contribution over the coming years.”
Bowen said he intends to keep Clear as its own entity and expects to be fully integrated within weeks.
“It has a very stable and satisfied base of customers and we don’t want to change the customer’s experience,” Bowen said. “What we’re intending to do is add products and services to those customers that haven’t been in the Clear stable to date, including 3G mobile, wireless broadband services and ADSL2.”
M2 is still active on the acquisition hunt, particularly in the SMB and wholesale services market, Bowen said.