news Mobile telco amaysim this morning announced it had bought privately owned Vaya for $70 million, in a move that will add some 140,000 subscribers to amaysim’s customer database and further consolidate the already tight mobile market.
Vaya was founded in 2011 and operates its business wholly online — with no retail presence. The company focuses on providing low-cost mobile products, especially below $20 per month, and has 40 staff in total, including facilities in Brisbane and outsourced centres in the Philippines and India. The company is privately held.
In a statement, amaysim chief executive Julian Ogrin said the acquisitin presented an “attractive and financially compelling” opportunity for amasyim to advance its strategy for profitable growth.
“The transaction will build on amaysim’s position in a consolidating market, enhance the company’s scale and leverage its online platform,” Ogrin said.
amaysim sees Vaya’s Philippines service centre as a great opportunity to create an overflow capacity for amaysim and to fast-track our platform, web and app development.
“Vaya’s online-only, strong market offering in the sub-$20 market segment complements amaysim’s ‘customer champion’ position and creates greater scale to our online-driven platform and operating network,” Ogrin said.
“I am very happy that the acquisition will present immediate value for amaysim shareholders. This is a rare opportunity to significantly grow our number of subscribers on the same network and in a complementary market segment.”
amaysim said it intends to operate the Vaya and amaysim brands separately, continuing to grow Vaya’s subscribers and not disrupting Vaya’s key supplier relationships. “It will be business as usual for both brands, under the strength of the amaysim executive team,” the company said.
Ogrin said: “We are ready to embark on this new chapter in our development and this Acquisition will not distract our management team. amaysim’s organic growth strategy and performance remains on-track and has not changed as a key focus for the team.”
However, it appears as though not all may have been well at Vaya financially prior to the acquisition. As part of its announcement this morning, amaysim noted that it would take on total liabilities to Optus of some $50 million, which would be payable over the next two years. It also noted debts to some other “vendors”.
In addition, amasim noted that the earnings from the acquisition this year were expected to only make a “minimal contribution” to amaysim’s earnings results.
Australia’s mobile reseller market has notoriously large revenues but very tight profit margins, and it appears that Vaya was not able to negotiate those shark-infested waters successfully, or at least that amaysim was able to make the company an offer it could not refuse. One can only hope that amaysim — which has done much to shake up that market — will be able to avoid the same fate, although a quick look at its financial results shows the same tight margins operating at the company.