ISP iiNet will buy Adam Internet for $60 million, less than a fortnight after a proposed acquisition of Adam by Telstra fell through.
iiNet said in a financial filing (pdf) that its plan to buy Adam Internet had already cleared regulatory approval by the Australian Competition and Consumer Commission (ACCC).
Telstra's plan to buy Adam Internet, which was announced last year, fell through because regulatory approval could not be achieved after months of discussions.
iiNet said it expects to complete the buyout by the end of August "subject to a number of standard procedural conditions".
Adam Internet has approximately 70,000 customers based in South Australia and the Northern Territory.
"Like iiNet, Adam Internet has a loyal customer base and strong reputation in its core markets," iiNet CEO Michael Malone said.
"This acquisition further builds on our strategy to grow scale in the national residential and business broadband segments."
iiNet said its total broadband subscriber numbers will exceed 900,000 once the Adam Internet deal is finalised.
It is in line to pick up fibre optic, data centre and DSLAM infrastructure from the buy.
iiNet said there was an opportunity to increase bundled products offered to Adam Internet customers "from iiNet’s existing product suite."
It also expected the integration of Adam Internet into the iiNet business to result in some "cost synergies", particularly around bandwidth provision and backhaul.
Adam Internet founder Greg Hicks said last year that he had previously fielded buyout offers "from pretty well every suitor" in the past decade, as the number of large- and mid-sized independent ISPs has dwindled.
Telstra had planned to buy out Adam Internet and run it "as a standalone subsidiary". Several reports had speculated that Adam would be run as a "low cost" brand in the Telstra product portfolio.
However, the Telstra deal hit regulatory snags in the lead-up to Christmas 2012, with the ACCC concerned that the arrangement could promote favouritism, skirt equivalence obligations and reduce price competition in South Australia.
The commission had been due to make a decision on the acquisition by February 7 of this year but the timeline was suspended a fortnight prior at the request of Telstra. It was never reinstated, and the buyout did not eventuate.
iiNet's buyout of Adam Internet is the latest in a string of acquisitions for the Perth-headquartered internet provider.
It bought Adelaide ISP Internode in December 2011 for $105 million.
A month earlier, it had snapped up Canberra's TransACT for $60 million in November 2011, later selling TransACT's fibre-to-the-premises network assets to NBN Co for $9 million.
In 2010, iiNet bought AAPT's consumer business, also for $60 million.