The country`s second-largest dial-up Internet service provider (ISP), Tiscali World Online, today said it would buy the remaining Internet access clients of JSE-listed NetActive in a R32 million deal.
R15 million of the price is to be settled at finalisation, with the balance due over an 18-month period.
"It is being entirely funded by our ongoing operations in SA," says World Online MD Graeme Victor. "It would not have been possible were we not profitable." World Online is wholly owned by European operator Tiscali after it bought Vodacom`s 40% stake in the company early this year.
About 3 000 business clients are affected, a mixture of hosting, dial-up and leased line users, representing a large part of the NetActive business. It sold its dial-up consumer base to M-Web for about R40 million in early 2000.
Also changing hands is a Johannesburg data centre. World Online`s only data centre is in Cape Town.
The deal will not affect staff, many of whom will be moving to World Online, or customers, Netactive said.
"Because the business is being sold as a going concern, with a major ISP as a new shareholder, customers will have the same services provided by the same people within the same infrastructure they are used to," Brick said in a statement. "Service level and pricing agreements will be unaffected."
World Online says the new customers will help it to become a serious player in the corporate market, where it will increase its footprint by 30 times. It has about 150 000 dial-up subscribers and 100 large corporate clients.
Victor says the sudden size boost will help make the company capable of taking on local behemoths Internet Solutions and UUNet.
"Tiscali is not a second-tier player anywhere else in the world and the strategy is to become first-tier here," he says. "I see us building our own network and infrastructure here eventually. This deal basically makes it possible for us to begin moving into the first tier."
NetActive will retain NetFlorist, the online flower retailer, and the call centre that previously supported its customers. It plans to develop an outsourced call centre business in which World Online will be its fist customer.
It was rumoured that Netactive was looking for a buyer for NetFlorist earlier this year.
Netactive reported a loss on continuing operations of R3.6 million for the six months to October last year and expected to continue reporting losses in the second half.
The deal is subject to formal shareholder approval.
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Tiscali buys World Online
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