Spirit Telecom acquires Phone Names Marketing for $4.2 million

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Spirit Telecom acquires Phone Names Marketing for $4.2 million
Geoff Neate

Melbourne ASX-listed Spirit Telecom has entered a binding agreement to acquire Phone Names Marketing and an associated entity for $4.2 million.

If approved, the acquisition will be funded with $2.25 million equity capital from institutional and sophisticated investors including MHOR Asset Management, co-founded by Vocus founder and former director James Spenceley.

Phone Names owns and sells inbound 13, 1300 and 1800 smart numbers and owns 2200 phone names. Some of its 400 customers include Domino's Pizza (1300 DOMINOS), Harvey Norman (1300 GO HARVEY) and Vodafone (1300 VODAFONE).

The business is currently valued at $1.5 million with an EBITDA of $800,000.

With the acquisition, Spirit hopes to provide high-demand phone names, the ability to bundle services to existing customers, achieve high incremental margins and generate significant cash earnings.

Spirit managing director Geoff Neate said Phone Names strengthened Spirit's full-service provider approach. 

"We see Phone Names as a unique asset along with blue-chip customer base that we can cross-sell core Spirit services to," he said.

MOHR Asset Management chief executive Spenceley said: "At 20 percent utilisation of the numbers, there is real leveraged upside, as [Spirit] increase that utilisation to result in cash flow benefits."

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