Upstart telco MyNetFone is continuing its late-year acquisition burst with the purchase of GoTalk's wholesale business and associated network assets for $1.4 million.
The company expects the deal to generate $19 million in additional revenue, with the aggregating organisations creating one of Australia’s largest wholesale voice networks.
“This is a wholesale network acquisition and it will grow our scale as well as remove competition from the market,” said MyNetFone chief executive Rene Sugo.
“ Overall, people like to see revenue but I am more focused on profitability and sustainability for the business.”
MyNetFone said in a financial filing that it is "not purchasing the company that GoTalk is currently housed in".
Sugo said the transaction has been in the works since February 2012. “We didn’t think it was going to go ahead, but then in October we realised it was happening, and we’ve put together the deal since then.”
MyNetFone plans to dismantle GoTalk’s wholesale network, described by Sugo as “ancient” and transition customers onto its own network. “It’s a bit like doing a heart transplant,” he said. “It’s tricky because you don’t want to kill the patient.”
The GoTalk deal follows recent deals which have seen MyNetFone acquire Connexus for $4.75 million in November, as well as a $3 million undertaking to connect with all 66 of Telstra’s Call Connection Areas.
The GoTalk deal is funded by capital raising from the market, as well as high net worth individuals, said Sugo.
“Although it seems like we’re doing a lot of small deals, those deals are almost as complicated as doing large deals,” he said.
While he was unwilling to comment on forward looking matters, Sugo said it is likely the first half of 2013 will be focused on consolidation and integration. “Having said that, you don’t know what is around the corner.”