Australian internet service provider iiNet is buying South Australian company Adam Internet for $60 million, after just two weeks ago a deal fell through between Adam and Telstra.
Two weeks ago Telstra was forced to abandon its bid for the budget internet business, as the Australian Competition and Consumer Commission deemed it would give the telco an unfair advantage.
The watchdog has already given the tick of approval to iiNet, meaning it will secure 70,000 new subscribers in SA and the Northern Territory, overall boosting its broadband subscribers to 900,000.
Adam Internet estimates its FY14 revenue will be $55 million.
“Like iiNet, Adam Internet has a loyal customer base and strong reputation in its core markets. This acquisition further builds on our strategy to grow scale in the national residential and business broadband segments,” iiNet chief executive Michael Malone said in a statement.
Completion of the acquisition is expected by August 31, 2013.
Services sector contracting at worst level in four years
The Australian services sector has fallen deeper into negative territory in July, with new figures revealing the sector is at its worst rate of contraction since March 2009.
The Australian Industry Group’s performance of Services Index revealed the sector had dropped 2.1 points to 39.4 points last month.
Outside of the GFC downturn of 2008/2009, this is the first time the Australian PSI has dropped below 40 points. Index levels below 50 indicate the sector is contracting.
“The services sector started the new financial year with a disappointing slump in sales and new orders,” Ai Group chief executive Innes Willox said in a statement.
“While recent interest rate cuts have brought some cost relief to Australian businesses and the fall in the Australian dollar is very welcome, their effects are yet to show up in stronger sales,” he says.
Retail turnover flat in June
Retail trade was flat in June, despite a 0.2% rise in May, according to the latest figures from the Australian Bureau of Statistics.
Overall there was no change in June, but turnover in cafes, restaurants and takeaway food services rose 0.9%.
Household goods retailing also rose 0.3% and food retailing was up 0.1%, but these gains were offset by significant falls in the “other retailing” category, down 1.1% and in clothing, footwear and personal accessory retailing.
Shares down slightly
Australian shares have dropped this morning, despite predictions the market would open higher.
The S&P/ASX 200 benchmark was down 10 points to 5106.8 just before midday.
The healthcare sector suffered the biggest losses this morning, down 129.5 points to 13,740.2.