M2 buys Primus for $192.4m
- 16 April, 2012 10:22
M2 Telecommunications (MTU) has acquired Primus Telecommunications Group for $192.4 million, with the transaction scheduled for completion on 1 June.
The deal was approved by the PTGi board, which had previously set out to devise a strategy to increase shareholder value, and includes 100 per cent of Primus and its subsidiaries on a debt free basis, as well as $10.6 million of restricted cash.
The contract includes around 165,000 customer contracts, both the iPrimus and Primus brands, around 500 staff, and the telco’s national network, encompassing data centres and metro fibre rings.
M2 has also launched a fully underwritten one for four renounceable entitlement offer to all eligible shareholders to raise around $83.2 million to partially fund the acquisition.
“The combined group will benefit from the strengths that each entity brings,” M2 chief executive, Geoff Horth, said in a statement. “The introduction of the Primus suite of next generation services along with the skilled and passionate team will ensure our sales teams are armed with the latest managed/hosted service offerings to meet the needs of current and prospective customers.”
According to Horth, the acquisition will place the company in a better position as the rollout of the National Broadband Network (NBN) gets underway, with Primus being one of the first retail service providers to sign on to offer the fibre service.
Primus chief executive, Peter Aquino, said the sale of the company to M2 was a “transforming transaction” for both companies.
“The net proceeds from the sale of Primus Australia represent a significant outcome of our strategic review process,” Aquino said in a statement. “We will assist M2 during the upcoming transition period, and ensure that our customers and employees have a smooth handoff to an experienced M2 leadership team.”
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