David Buckingham, the chief executive of iiNet, has reportedly departed the company within days of the broadband provider being taken over by TPG.
According to a report in the Australian Financial Review, Buckingham was told last Friday “his services were no longer required”, off the back of the Federal Court approving the $1.56 billion TPG takeover on August 21.
While TPG chief operating officer Craig Levy confirmed Buckingham’s departure to Fairfax, Levy declined to comment on the reason, saying “I don’t think there’s much to comment on”.
Buckingham was appointed iiNet chief executive in mid-2014, having served as the internet service provider’s chief financial officer and company secretary since January 2008.
Prior to joining iiNet, Buckingham spent a decade working in finance for Virgin Media.
Buckingham is also not the only executive to leave iiNet in recent months, with four of the company’s directors – Peter James, Louise McCann, Patrick O’Sullivan and Paul McCarney – resigning prior to the TPG deal being finalised.
Also, iiNet chair Michael Smith is reportedly due to leave the ISP this month, as is fellow board member David Grant.
Foad Fadaghi, managing director and principal analyst at Telstye, told SmartCompany this morning while there are conflicting reports about whether Buckingham was asked to leave iiNet or left on his own accord, it is not uncommon to see management shake-ups following acquisitions.
“With acquisitions there are always changes, particularly in management,” Fadaghi says.
“Where there is duplication involving responsibilities, there will obviously be some changes.”
Fadaghi says the changes often “driven by a top-down approach”, starting with the executive management team and then flowing on to the “functional parts of the business”.
But in the case of iiNet, Fadaghi says it makes sense to consider management changes in the context of the broader market for broadband services in Australia.
“The broadband market is not currently growing rapidly and growth is being driven by acquisitions and mergers,” he says.
“In that environment, having a top-heavy structure doesn’t make as much as sense as if it were being driven by fast-growth companies.”
Nevertheless, Fadaghi believes the TPG takeover of iiNet may be one of the last large-scale acquisitions that will occur among Australian ISPs.
“The dynamic acquisitions in the sector have already been done,” he says.
“The rest will be tinkering around the edges.”
SmartCompany contacted Buckingham, TPG and iiNet but did not receive a response prior to publication.