Southern Cross Telco Pty Ltd, a wholly owned subsidiary of M2 Telecommunications Group Ltd (MTU), has executed an agreement with Time Telecom Pty Ltd and related entities under which M2 has acquired the business assets of Time Group. The Time Group assets acquired by M2 include customer contracts and related records. Time Group is an established telecommunications service provider with approximately 30,000 small and medium sized business (SMB) and residential customers Australia-wide. The acquisition of the Time Group assets further strengthens M2′s position as the pre-eminent challenger in the SMB telecommunications market. The transaction involves a maximum cash consideration of $18.35 million for the Time Group assets, payable over three tranches, the first payable upon completion, with the remaining tranches payable six and nine months after completion. The second and third payment tranches are subject to the achievement of certain minimum performance milestones. The purchase of the Time Group assets is funded from a combination of M2’s available working capital and a debt facility set in place for the purpose of this transaction.
M2′s CEO, Geoff Horth said of the acquisition, “We are extremely pleased to have acquired the Time Group customer base. We have worked closely with the owners of Time Group for several years through our M2 Wholesale division, during which time we have seen their business grow in both scale and operational maturity. The transaction has appeal to M2 for a number of reasons, most notably that the assets will contribute to earnings for the 2013 financial year and were acquired for less than three times annual EBITDA, consistent with the purchase price of other assets of this nature. In addition, the customer contracts acquired are largely single-product customers presenting excellent cross sell opportunities for our Inside Sales Team.”
Established in 1999, M2 Telecommunications Group Ltd (MTU) is Australia’s largest network independent provider of telecommunications services. M2 employs more than 400 people nationwide, across the Melbourne headquarters and offices in Hobart, Sydney, Brisbane, Perth and Wollongong. M2 also provides fixed line, 3G mobile and broadband services in New Zealand. M2’s retail business division operates under the leading brands of Commander, Southern Cross Telco and in New Zealand, Black + White. Within the retail division, M2 offers a suite of telecommunications services, equipment, personalised service and value-added offerings targeted principally at the small- and medium-sized business market. Through the M2 Wholesale division, M2 provides wholesale fixed line, mobile and data telecommunications services to small and medium-sized telecommunications service providers and Internet Service Providers (ISPs).