PIPEX Acquires Rival Homecall
Posted: 23rd Mar, 2006 By: MarkJ
ISP Pipex has today announced the acquisition of Caudwell Communications Limited (Homecall) for an undisclosed sum. This includes the assumption of £43 million bank debt, which has now been repaid.
The news is likely to be greeted with interest among HomeCall's subscribers, some of which have had a few negative things to say about HC's service quality over the past couple of months:
Homecall is one of the UKs leading providers of voice, line rental, and broadband services. Homecall currently has over 500,000 customers of which in excess of 350,000 take more than one service.
The last set of audited results for the year ended 31 December 2004, showed turnover of £91.4 million and a loss before tax of £34.7 million. The losses were principally incurred by a significant and successful customer acquisition programme. Homecall is now trading profitably at the profit before tax level.
Chairman of PIPEX, Peter Dubens, commented: "This acquisition brings with it four very important elements: additional scale, high street and call centre sales channels, accelerated returns on our LLU strategy and significant cross-selling opportunities.
In terms of scale, we will now have over 1 million customers in the UK across broadband, voice and hosting, further consolidating our position as a major player in the broadband market. PIPEX traditionally sells over the internet and the acquisition brings significant call centre sales expertise and importantly access to high-street footfall through a distribution agreement with Phones4u. We can use these distribution channels not only to drive new business but also cross-sell our hosting and broadband services, a model that should generate financial benefits as well as significantly increase customer retention. As a result, we expect the financial effects to be immediately beneficial to PIPEXs shareholders.
Pipex has certainly been busy, having only just settled down from its acquisition of two other ISP's, Nildram and Freedom2Surf. We note that this acquisition is centred on Caudwell's fixed-line telephone business.
The news is likely to be greeted with interest among HomeCall's subscribers, some of which have had a few negative things to say about HC's service quality over the past couple of months:
Homecall is one of the UKs leading providers of voice, line rental, and broadband services. Homecall currently has over 500,000 customers of which in excess of 350,000 take more than one service.
The last set of audited results for the year ended 31 December 2004, showed turnover of £91.4 million and a loss before tax of £34.7 million. The losses were principally incurred by a significant and successful customer acquisition programme. Homecall is now trading profitably at the profit before tax level.
Chairman of PIPEX, Peter Dubens, commented: "This acquisition brings with it four very important elements: additional scale, high street and call centre sales channels, accelerated returns on our LLU strategy and significant cross-selling opportunities.
In terms of scale, we will now have over 1 million customers in the UK across broadband, voice and hosting, further consolidating our position as a major player in the broadband market. PIPEX traditionally sells over the internet and the acquisition brings significant call centre sales expertise and importantly access to high-street footfall through a distribution agreement with Phones4u. We can use these distribution channels not only to drive new business but also cross-sell our hosting and broadband services, a model that should generate financial benefits as well as significantly increase customer retention. As a result, we expect the financial effects to be immediately beneficial to PIPEXs shareholders.
Pipex has certainly been busy, having only just settled down from its acquisition of two other ISP's, Nildram and Freedom2Surf. We note that this acquisition is centred on Caudwell's fixed-line telephone business.
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