AGL Energy has struck an agreement to acquire regional telecommunications provider Southern Phone Company Limited (SPC), which claims to have 100,000 customers nation-wide.
Established in 2002 after receiving $4.77 million in funding from the Federal Government’s Networking the Nation scheme, SPC provides fixed line, mobile and internet communications services in regional Australia.
Under the telco's constitution, only Australian local government councils can hold shares in SPC. Its dividends are paid to local government shareholders and are used for the benefit of their communities.
The offer from AGL, if accepted, would see the acquisition of all issued capital of SPC from its current 35 local council shareholders for $27.5 million.
The move comes just months after AGL backed out of a previous agreement to acquire publicly-listed telco Vocus a week after agreeing on exclusive due diligence arrangements with the company.
According to AGL CEO and managing director Brett Redman, the proposed acquisition of Southern Phone Company represents the energy provider's first step into the broadband and data sector, which is part of the company's growth strategy.
Redman also noted that the move builds on AGL's regional presence as an energy retailer and SPC’s existing telecommunication services and capabilities.
“The acquisition allows us to create space for new products and services that meet the needs of increasingly connected customers as energy and data converge," Redman said.
“We are focused on responding to our customers’ evolving needs as we transform from a major energy retailer to a major, broader essential service provider.
“We believe the acquisition, as part of our broader strategy, will create significant value for our connected customers and also for our shareholders," he said.
The publicly-listed energy supplier has indicated that it intends to maintain SPC’s business operations, brand and unique product offerings focused on regional customers.
The agreement remains subject to a number of conditions, including acceptance by SPC shareholders of AGL’s offer.