Nine Telecom Ltd

Nine Telecom Ltd - Appointed Advisor 2006

Nine Telecom is an indirect wholly channel focused telecoms business. Nine became one of the UK’s fastest growing service providers following the acquisition of Club Communications in 2008, the market leader in billing services and direct debit platforms.

Nine Telecom entered the market in 2001 engaging a network of commission based dealers. Customers are contracted directly to Nine Telecom who provides billing and customer service. In the year ending March 2007 the business had grown sales revenues to £5million, making an operating loss of £300k. In 2005 the business opened a wholesale division targeting the UK’s 1000 strong reseller channel, providing lines and calls to resellers who contract directly with their customers.

The acquisition of Club, predominately a wholesale business, created a leading presence in the reseller channel bringing scale to the overall business. Club’s back office functions significantly enhanced Nine’s dealer and reseller proposition and support. Nine acquired Club Communications for a consideration of £4.6m funded by a mixture of cash, debt and shares. The deal was structured whereby shareholders of Club accepted £1.6m in shares, representing 20% of the new entity.

The combined entity of Nine and Club generated £21m in sales income and through productivity gains and increased buying power produced £750k net profit in the year following the transaction.

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