Primus buys AOL7
Under the proposed agreement, AOL will license the exclusive right to operate an AOL-branded ISP in Australia to the Primus Group, without interrupting the usual services for AOL members.
Managing director of Primus Telecom, Greg Wilson, said in a statement released today -We believe that the acquisition of AOL|7 will be an excellent fit with the operations of our own Internet and telephony business."
The acquisition will add another 90,000 subscribers to the Group's iPrimus brand, creating a multi-service provider and amalgamating the organisation's products and interactive content.
Wilson said he was confident that the acquisition will benefit the group financially, adding -[It] will help to expand our customer base as we continue to grow in this important sector of the market."
AOL|7 was previously a joint venture between America Online Inc. (AOL), AAPT AOL|Limited, a unit of the Telecom New Zealand Group, and the Seven Network Limited. The AOL brand itself is a wholly-owned subsidiary of Time Warner Inc.
Conditions of the purchase include exclusive access to certain AOL content and applications for pre-established AOL|7 customers. iPrimus says its customers will also benefit from the partnership, gaining access to general content, online expertise and technologies.
Primus Telecom said it plans to operate AOL|7 as a stand-alone business, remaining in its current Sydney location.
"We understand the need to be able to manage this operation in such a way that we add value to the whole Internet experience, which will be of mutual benefit to the customer and the iPrimus brand," Wilson said.
The Primus Group says it plans to use the relationship to introduce new products and services, particularly relating to broadband services, to its newly expanded market.
Members of the former AOL|7 coalition claim to be satisfied with the terms of sale. AAPT says it will receive around AU$7.5 million in cash and inherit sole management of around 48,000 consumer dial-up and broadband customers.
The Seven Network Ltd said expects to receive cash funding of more than AU$23 million as result of the sale, slightly less than the current book value of its AOL|7 interest.
Chairman of the AOL/7 board, Steven Wise, said all parties of the AOL|7 coalition believed the sale to Primus would better support the continued growth of the individual brands in the future.