Tiscali S.p.A. has agreed to acquire Pipex Communications’ consumer broadband and voice division for a total consideration of approximately £210 million, on a debt-free basis, before adjustments. The corporate broadband customers will remain within the Pipex Group. The subsidiaries being sold to Tiscali are: Switch2 Telecoms Limited, Pipex Homecall Limited, Toucan Residential Limited, Pipex Internet Limited and Toucan Residential Ireland Limited. As of 31-December-2006, these subsidiaries had approximately 570,000 Broadband customers and 480,000 Voice customers.
Pipex’s Broadband and Voice division is a leading provider of telecommunications and Internet services in the UK market, reporting revenues of £231.7 million and profit before tax of £13.9 million, excluding amortization of goodwill and inter-company interest, in the year ended 31 December 2006.
Following the sale, Pipex will consist of 3 divisions namely Web Hosting, Business Services and Pipex Wireless (WiMAX). In hosting, Pipex is now one of the two largest hosting providers by subscriptions in Europe (based upon SW-Soft statistics). Pipex’s domain name market share has also increased by 25% over the last year, to 2 million domains. More than one in every five domains in the UK is registered through Pipex hosting. Pipex Business Services also reports strong growth, with new contracts from companies including T-Mobile, Servista, Cost Cutter, Red Bull Racing, Rosebys, British Museum and British Library. Pipex Wireless has launched WiMAX services using licensed spectrum in trials in Milton Keynes, Warwick and Leamington Spa. In addition to partners Intel, National Grid Wireless and Ericsson, the division has announced a strategic partnership with Nokia Siemens Networks which covers network infrastructure, services and software. Together, Pipex Wireless and Intel will launch wireless services across the UK.
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- In August 2006, Tiscali and Video Networks International agreed to integrate their UK market operations. Under the deal, Video Networks International Ltd (VNIL) would contribute 100% of their UK operations – Video Networks Ltd (VNL) – into Tiscali UK Ltd, fully owned subsidiary of Tiscali SpA, in exchange for an interest in Tiscali UK. As a result, Tiscali SpA would control 88.5% of Tiscali UK, while VNIL would own 11.5%.
