Amaysim To Acquire AusBBS: Eyes Broadband Goal
Mobile services provider amaysim is looking to enter the broadband market, having entered into an agreement to acquire Australian Broadband Services (AusBBS).
Today confirming “its strategy of entering into the broadband market in order to be ready for the upcoming ‘forced churn’ event presented by the rollout of the National Broadband Network (NBN)”, amaysim described the broadband market as “a natural extension” of its existing business.
Seeking to accelerate its entry into the market, amaysim has entered into a binding share purchase agreement to acquire 100 per cent of the shares in AusBBS.
Under the transaction, amaysim will pay $1 million cash and $1.5 million in amaysim shares (with 50 per cent of shares received by AusBBS key personnel to be escrowed for six months) on completion, with shares to be issued at $1.77.
The transaction will also see amaysim pay $1.5 million in amaysim shares one year after completion, subject to customary warranty claims and the successful integration of AusBBS’ proprietary platform into its business.
A maximum earn-out of $5.45 million, payable in cash and amaysim shares, has also been agreed to by the parties, subject to minimum and maximum targets in respect of subscriber growth and profitability, to be measured and paid at the end of the second and third years after completion.
“It is logical for amaysim to enter the broadband market in the next 12 months to take advantage of the likely customer switching behaviour that will stem from the continued NBN rollout,” amaysim chief executive officer Julian Ogrin commented.
“Acquiring AusBBS’ technology platform is a great way for us to accelerate our broadband strategy, become even more relevant in data-hungry Australian households and bring our ‘less hassles’ approach to broadband.”
The transaction remains subject to the satisfaction of customary conditions precedent, with completion expected to occur in late August.