Melbourne-based telecommunication services company, M2 Telecommunications Group, has confirmed it is acquiring Dodo and Eftel for a total $248 million.
Dodo is a privately-owned telco services provider founded in 2001 by Larry Kesterlman and Michael Slepoy, and Eftel is an Australian Internet service provider (ISP) offering services across residential, small to medium business (SMB) and corporate sectors. It was established in 1999.
M2 chief executive officer (CEO), Geoff Horth, told ARN the deal is split into $204 million and $44 million for Dodo and Eftel, respectively.
Although Dodo is an M2 rival, the companies have maintained a lengthy relationship prior to this deal. M2’s binding sales agreement with Dodo was made as a result of the latter’s services and reseller models which are in line with M2’s goals.
Dodo also allows M2 accelerated expansion into the retail space. The deal is expected to close in six weeks, with the Eftel deal predicted to conclude a month later.
Dodo will bring M2 its 400,000 or so customers and about 660,000 active Internet services, boosted further by the 48,000 Eftel customers and 130,000 Eftel Internet services.
While Dodo is unlisted, M2 is offering Eftel shareholders $0.358 per share in either cash or new shares.
According to Horth, the acquisitions set M2 up to become a stronger competitor to Australia’s telco giants, such as Telstra and Optus, as it moves into the “billion dollar company” category.