Mobile sim card company amaysim is buying broaband group AusBBS so it can get in on the rollout of the National Broadband Network (NBN).
The company has agreed to pay between $4 million and $5.4 million for Australian Broadband Services (AusBBS) to gain access to a proprietary technology platform purpose built for broadband.
A short time ago, amaysim shares were up 3.5% to $1.925.
amaysim Australia, which listed on the ASX a year ago, says the strategy is to be ready for the upcoming forced churn caused by the rollout of the NBN as Australians switch to the faster network.
“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,” says CEO Julian Ogrin said.
“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 purchase price includes $1 million in cash, $1.5 million in amaysim shares on completion, another $1.5 million in shares one year after completion and more depending on earnings growth.
The maximum earn-out is $5.45 million payable in cash and shares.
Rob Appel, the CEO and major shareholder of AusBBS, says the focus of the past four years has been to create the most flexible, scalable and efficient platform possible to deliver broadband.
“After seeing how amaysim made its mark on the mobile services market we’re excited at the opportunity to become part of an industry-leading team as it takes the logical step into the growing NBN market and we take our shared vision to the next stage of growth,” he says.
amaysim was advised by Investec, Clayton Utz and PwC.
In February, Amaysim announced a 96% fall in its first half year profit to $681,000, mainly due to listing costs and the purchase of prepaid mobile business Vaya, on a 17.9% lift in revenue to $117.28 million.
The subscriber base increased 12.5% to 764,000 from 679,000.