Hi °C | Lo °C MOBILE firm Vodafone Ireland has acquired telco Perlico for about €30m in cash while the remainder of the total €80m consideration will be paid as part of an earnout clause over a number of years.
The move launches Vodafone into the fixed voice and broadband market and comes against a backdrop of lower average revenues from its customers in the increasingly competitive and mature mobile market.
While the total consideration for Perlico is €80m, the rest of the payment will be made over a period of years once Perlico reaches certain performance targets in relation to customer figures and profitability.
Perlico has just over 62,000 customers -- 25,000 of which are broadband subscribers.
The company had sales of €40m in the year ended December 2007 on losses of €7m.
And while some market watchers have said the total consideration is high at €80m given the figures, others pointed out that the upfront cash payment of €30m is lower than the valuation on the company at the end of last year of €55m when a number of high profile investors like Michael Smurfit injected cash into Perlico.
Commenting on the acquisition, Vodafone Ireland chief executive Charles Butterworth, said the move was a natural one for the mobile phone company.
"We completed a strategic review of the market before choosing Perlico," he said adding that the company will be a wholly owned subsidiary of Vodafone Ireland.
"Over half of all voice minutes are currently carried on fixed lines and we a phenomenal opportunity there."
He added that the companies will be launching a number of converged services on the Irish market in the New Year.
"We will be launching some very attractive, innovative offers in the coming months. Our customers want these services."
According to Perlico founder Iain McDonald, these offers could also include new mobile services from Perlico through a Mobile Virtual Network Operator (MVNO) deal with Vodafone, whereby Perlico would piggyback in the mobile operators network.
He added that the deal meant a change of ambitions at Perlico from being Eircom's main competitor to being part of a leading telecommunications firm.
The combined businesses will comprise of 2.2m mobile subscribers from Vodafone and 62,500 from Perlico.
Mr Butterworth said yesterday that there are not expected to be any job losses at all as a result of the deal at Perlico while Mr McDonald added that Perlico employees will benefit as a result of the deal as part of a incentive scheme for staff.
