Newcall Group announced on Friday that it had exercised its option to purchase 100% of the Auckland ISP IproLink.
The acquisition, at a price of $3.6 million, has been funded half by Newcall shares and half in cash. There is an agreement between the parties limiting the sale of the shares for at least six months.
Newcall entered into the option agreement in November, seeking Internet capability to round out its range of telecommunication solutions, which include mobile, tolls, calling cards and e-commerce. The company is also currently installing switching nodes throughout New Zealand and has whoelsale agreements with international carriers.
Newcall managing director Norman Nicholls said the two companies were well suited because they had remarkably similar customer bases.
"IproLink has a customer base of niche small to medium size businesses throughout New Zealand. This will allow Newcall to extend its own product range and existing Newcall customers will also benefit from the extended services that will be available to them. "
IproLink, which launched as Internet Prolink in 1995, was one of Auckland's first commercial ISPs and has earned a reputation for reliability but, like other mid-sized ISPs, has grown relatively little since the market became dominated by Xtra, Ihug and Clear.
Newcall Group is the recently listed parent company of Newcall Communications. Other companies in the group include Newcall Communications USA; Newcall Communications (Australia), and Newcall Communications International, which is based in Singapore.
The company's principal shareholder is CTW, a subsidiary of Asia Pacific Wire and Cable Corporation, a US company which is traded on the NASDAQ exchange.