iiNet to acquire Netspace for $40m

ISP iiNet (ASX:IIN) has announced it has arranged to acquire Netspace for $40 million.

The 100% debt funded acquisition is expected to deliver potential synergies of $2 million in the first year, and $5 million in the second, iiNet said. It should be earnings per share accretive in its first full financial year.

It will boost iiNet’s market share to 12.4%, adding 120,000 active services to bring its total to 920,000.

Subject to meeting a number of procedural conditions, the deal is expected to close by April 30.

“This acquisition will bring iiNet closer to our target of 15% market share in the fixed line broadband market prior to the commencement of the NBN,” iiNet CEO Michael Malone said.

IIN shares have grown 5.3% to $2.580 today following the announcement.