iiNet announced today that it has bought rival internet service provider Netspace for $40 million.
iiNet began as a small internet service provider in Perth, but has grown to be the third biggest in Australia. While the company is one of the national leaders, it felt its Victorian and Tasmanian markets could benefit from the acquisition, given these are particularly strong areas for Netspace.
“This acquisition will bring iiNet closer to our target of fifteen percent market share in the fixed line broadband market prior to the commencement of the National Broadband Network,” says Michael Malone, chief executive officer of iiNet.
“Netspace is a natural fit for iiNet given the strong alignment of the companies’ products, networks and cultures. It is a great business, having grown strongly in the residential market, and has a loyal customer base given its customer service focus.”
The two brands will continue operate separately for the time being, with the technical aspects of combining the two networks to occur at a later stage. “Until now, this has been a discussion between the shareholders. Now, we get to sit down with the Netspace team and work out the smartest steps to work on over the next year or two, to get the best out of both brands,” says Malone in a forum post about the acquisition.
Together, iiNet and Netspace now have around 920,000 broadband customers.