iiNet this afternoon confirmed reports this morning that it was in talks to acquire fellow ISP Netspace, but said the discussions were “at an early stage and remain incomplete”.
In an article in the speculative “Street Talk” section of the AFR, the paper reported this morning it was believed a deal would be announced within two weeks, with a price tag of between $60 and $75 million. iiNet is led by chief executive Michael Malone (pictured).
“In response, we advise that we have been in discussions with several parties including Netspace, and note that the price currently being discussed is a long way below the price range quoted in the media,” said iiNet in a statement to the Australian Stock Exchange.
“However, the discussions are at an early stage and remain incomplete, and the iiNet board has taken no decision regarding the potential acquisition.”
The company said it had publicly stated it was interested in “sensible” acquisitions in the future and as a result, it was continually engaged in assessing strategic options and regularly held discussions with industry participants — “often associated with a potential takeover”. The company said if any discussion led to a “material development”, it would inform shareholders.
Netspace was founded in 1992 by its current managing director Stuart Marburg, and technical director Richard Preen, while iiNet is led by chief executive and founder Michael Malone (pictured).
Currently the company has around 80,000 customers Australia-wide. It has historically had a strong presence in Melbourne — as compared to iiNet’s historical roots in Perth — and also in Tasmania. It is not listed for public trading but is privately held.
Netspace is one of a clutch of companies which also includes iiNet, TPG, Adam Internet, Amcom and iPrimus that make up the second tier of major players in the Australian telecommunications landscape.
iiNet and TPG particularly have a history of acquisitive behaviour. Among iiNet’s major acquisitions include the buyout of fellow Perth-based ISP Westnet, while TPG merged with Soul in 2008 and subsequently is in the final stages of acquiring wholesale fibre backhaul player Pipe Networks.
Image credit: iiNet