Zintel Group agrees to acquire Cogent for $1.9M, employees participate

Friday 18th September 2009

Zintel Group Ltd, the NZAX-listed telecommunications company, agreed to acquire Cogent Communications for $1.9 million, creating a communications business with combined sales of $60 million.

Zintel will issue 3.33 million shares at .30c apiece to employees, raising $1 million, it said in a statement. The company doesn’t expect to need to raise debt funding for the transaction or any additional investment in the target business, it said.

Zintel said additional working capital, transitional costs and one-off expenses “will significantly impact” profit in the year through March 31, 2010, though the group will “enjoy considerably improved growth and profitability in future years.”

“This acquisition is an ideal fit as part of our wider growth strategy,” said Nick Gordon, chairman of Zintel.

The transaction, which is conditional, would take effect from Oct. 1, it said.

Cogent is a Onesource Group company, offering telecommunications sales and support for small to large companies in New Zealand, according to the statement.

Shares of Zintel traded yesterday unchanged at 30 cents and have gained 20% in the past month.

Businesswire.co.nz

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