PIPEX buys Toucan and Bulldog

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PIPEX have taken the plunge and have bought Bulldog and Toucan. We were looking at Bulldog a while back, but dropped out of the running for Bulldog when we realised that they had a 25% failed billing rate. This will take PIPEX to 1.1m customers with 500,000 broadband. >From my perspective, I was under the impression that PIPEX's acquisition of F2S was primarily on credit, so where has all of this extra money come from?

Pipex Communications plc (PXC), (“Pipex”) a major provider of integrated telecommunications and internet solutions including broadband, voice, domain name registrations and hosting, announces the acquisition from Cable & Wireless of Bulldog’s residential and small business broadband customer base, website (www.bulldogbroadband.com), rights to the Bulldog brand and domain names, for a consideration of £12m in cash.

Separately, Pipex has signed up to use Cable & Wireless’ unbundled local loop (LLU) access network, which will cover 800 exchanges. Pipex’s policy is to use a hybrid network which is a mixture of its own Local Loop Unbundling footprint and wholesale. Cable & Wireless fits extremely well into this mix.

This acquisition brings the total broadband and voice customer base to 1,140,000 of which those taking broadband now exceeds 500,000. 90% of Bulldog’s 110,000 customers subscribe to a Broadband, voice and wholesale line rental package, which delivers an ARPU of £34 per month.

Peter Dubens, Chairman of the Pipex Communications plc, said,

“The acquisition of Bulldog brings further scale to the Pipex Group and we are delighted to welcome all the Bulldog customers. Cable & Wireless is a good addition to our supplier mix and going forward this relationship will add breadth to the choice of services that we are able to offer to all of our customers.”

Pipex Communications plc (PXC), (“Pipex”) a major provider of integrated telecommunications and internet solutions including broadband, voice, domain name registrations and hosting, announces an agreement to acquire the UK business of Toucan, the UK telecommunications provider, for a consideration of £24m from IDT Telecom. The consideration will be satisfied by £20m in cash and £4m in stock.

Currently, Toucan provides voice, mobile and Broadband Services to its 185,000 customers. With 57% taking more than 2 services, Toucan delivers an average ARPU of £23. Following the acquisition of Toucan and Bulldog, Pipex now has a broadband and voice customer base of 1.14m of which over 570,000 take broadband.

Rationale for acquisition:

• Addition of mobile to product portfolio
• Excellent customer service operations
• Improvement to the cost of sale
• Further sales channels with outbound sales forces in Israel and India
• Greater scale to the synergies of LLU

Peter Dubens, Chairman of Pipex Communications plc, said,

”The acquisition of Toucan brings Pipex further scale across broadband and voice and we welcome Toucan customers to the Group. Toucan maintains very high levels of customer service in Ireland which we intend to replicate across the Group as a whole.

“Importantly, this acquisition will enable Pipex to provide triple play in the UK market by the end of 2007. Broadband, voice and mobile will be bundled and offered to our entire base in the coming months.”