Amcom Telecommunications (ASX:AMM) has announced its intention to acquire voice and data services provider IP Systems (IPS) in a transaction that could equate to up to $20.5 million.
Amcom provides fibre optic networks in Perth, Adelaide and Darwin and DSL and voice services to small to medium enterprises. The acquisition would extend Amcon's services to the enterprise voice space. It would also increase Amcom's footprint from Perth, Melbourne and Adelaide to Sydney, Brisbane, Canberra, Adelaide, Auckland and Wellington.
Amcom spokesperson, David Ikin told CRN that IPS staff and executives will join Amcom.
"The acquisition is about growth so they will all [join]."
The total purchase price would be somewhere between $9.5 million and $20.5 million - depending on profits - up until June 2012, said Ikin.
Initial consideration will be $6.5 million comprising of a cash consideration of $5.3 million and 4.1 million shares in Amcom at 30c per share.
Clive Stein, Amcom's CEO said IPS has "ten years experience in deploying reliable market leading voice and communications technology, and its products are ideally suited to Amcom's existing customer base".
Amcom was unable to comment about the integration of IPS's fibre network at the time this story went to press.
The transaction is subject to regulatory approval and approval by Amcom shareholders at a General Meetin in April 2010.
Results
Amcom has reported a net profit after tax of $7.6 million for the six months to 31 December 2009, up 66 percent over the previous corresponding period.
On a like-for-like basis (excluding one off costs in the prior period), the reported net profit after tax was up 24 percent.
Additionally, Amcom's revenues increased by 16 percent, and (earnings before interest, tax, depreciation and amoritisation (EBITDA) increased by 21 percent, driven by new sales and growth in new customer connections.
Stein said the result was very pleasing, and demonstrated the strength of the company's business model.
"We are continuing to see very strong demand for our products from the corporate, government and wholesale sectors," he said.
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