iiNet has reached an agreement to acquire Adelaide-based Internode for AUD105 million (USD106 million), continuing its ongoing acquisition roll to expand its presence in the Australian broadband services market.
Set to be completed by the end of Feb. 2012, the acquisition will give iiNet an additional 260,000 subscribers including 190,000 broadband connections, in addition to 36 DSLAM network exchanges situated in South Australia and on the Eastern seaboard.
If the deal gets all of the necessary approvals, iiNet will have a total of about 900,000 broadband subscribers. This would enable it to more effectively compete with SingTel Optus, the second largest broadband provider behind Australian incumbent service provider Telstra.
Under the terms of the agreement, Internode founder and majority shareholder Simon Hackett will maintain a 7.5 percent stake in iiNet with the condition that he cannot increase his stake for a year. What's more, Internode will continue to be run by Hackett and the company's management team as a separate business unit.
This is the third acquisition iiNet has made in the past year, having previously purchased the consumer unit of AAPT from Telecom New Zealand in August 2010 and Canberra-based ISP TransACT in November this year.
Michael Malone, iiNet's CEO, said the merger with Internode "strengthens the Company's position in the NBN environment and will allow iiNet to leverage the market opportunities presented from a base of greater scale."
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