Diversified telecommunications services provider M2 Telecommunications Group Limited (MTU) has executed an Asset Sale Deed to acquire all of the smal and medium business assets and associated intellectual property of Commander Communications Limited. This transaction represents a major strategic coup for the expanding M2 Group, adding in excess of $100 million per annum in customer revenues (from fixed line, mobile and data services) together with the widely recognised “Commander” brand. Consistent with transactions of this type, the completion of the sale is subject to certain conditions precedent. M2, Commander and third parties intend to satisfy the conditions precedent between now and the date of completion of the sale.
The Commander assets acquired by M2 in this transaction include Al SMB customer contracts of Commander and its related entities, the “Commander” brand/trademark, other Commander-owned brands/trademarks, including “Australia Star”, “Cal Australia”, “Newtel”etc and Al proprietary Commander operating systems, software, plant and equipment (excluding network infrastructure) and selected inventories. The acquisition of these assets by M2 marks the end of a prolonged period of uncertainty for Commander’s SMB operations. M2 also plans to work closely with the established nationwide Commander sales and service network, with a view to reinvigorating Commander’s SMB product and service offerings.
M2 will pay a total consideration of $19 million for the Commander business assets, excluding inventories, payable in part upon Completion and in part by way of a deferred settlement arrangement. In terms of its financial contribution, the Commander business is expected to be substantially earnings accretive for M2, delivering incremental earnings per share (EPS) in excess of 50% in the 2009/10 financial year. The acquisition of the Commander SMB assets and associated companies will lift M2 group revenues to in excess of $360 million, further consolidating its position as Australia’s largest network independent telecommunications services provider.
M2′s Managing Director / CEO, Vaughan Bowen, said of the Commander transaction, “We are thrilled to have been able to reach agreement to acquire this excellent business. We believe there is a significant opportunity to take Commander to a new level through expanded product offerings and enhancement of its sales and service network. From a financial perspective, the contribution of Commander to M2 group earnings and EPS is expected to be very significant in the initial year and we expect earnings to improve further in subsequent years, following initial transitioning expenses and once new sales and marketing initiatives are up and running.”
M2 Telecommunications Group Limited (MTU) is Australia’s largest network independent provider of fixed-line, mobile and data telecommunications services. M2 is head-quartered in Melbourne and employs approximately 250 people nationwide. M2 also provides fixed-line and 3G mobile services in New Zealand. Within its “M2 Telecom” business division, M2 offers a suite of unique bundled telecommunications services and value added offerings targeted principally at the small enterprise market, distributed through an exclusive trans-Tasman network of sales dealerships, agencies and through targeted on-line marketing ventures. “M2 Wholesale” is the other core business division of M2, in which wholesale telecommunications services are supplied to small and medium sized telecommunications service providers and Internet Service Providers (ISP’s). M2’s consolidated revenues now exceed $250 million (annualised).
www.m2.com.au
www.commander.com
