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M2 Acquires Assets Of Time Group
Tuesday 28 February 2012, 11:53AM
By Media PA

M2 Telecommunications Group Ltd – which provides fixed line, 3G Mobile and Broadband services in this country through its New Zealand-based Telco Black + White – has made another major acquisition in Australia.

M2 Telecommunications Group Ltd has executed an agreement with Time Telecom Pty Ltd under which M2 has acquired the business assets of the Time Group.

The Time Group is an established telecommunications service provider with approximate 30,000 small and medium sized business (SMB) and residential customers Australia-wide.

The Time Group assets acquired by M2 include customer contracts and related records. M2 is the parent company of New Zealand-based telco, Black + White.

“The acquisition of the Time Group assets further strengthens M2’s position as the pre-eminent challenger in the SMB telecommunications market in Australasia,” said Johnathan Eele, the Auckland-based CEO and Managing Director of Black + White.

Eele said: “This transaction demonstrates our Group’s capability to identify, execute and integrate such deals. I look forward to us demonstrating this in the New Zealand market.”

The transaction involves a maximum cash consideration of A$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 tream,” Mr Horth said.