Easynet poised to scoop up Ipsaris

ISP to merge with broadband network provider

European internet service provider Easynet is to merge with UK broadband network provider Ipsaris, subject to shareholder approval. The company will then look to expand its channel presence.

Easynet will acquire Ipsaris in exchange for £82.9m worth of Easynet shares. The merged group is being valued at about £475m.

The group, which will retain the Easynet name, will supply broadband services to European businesses. It will combine Easynet's salesforce, customer base, IP networking skills and business model with Ipsaris' network assets, IT systems and engineering skills. The venture will have about £314m to support its growth and Marconi will become the new company's majority shareholder.

David Rowe, chief executive of Easynet, will become executive chairman of the group. Ipsaris' Neil Rafferty and Will Gardiner will become chief executive and chief financial officer respectively.

Rowe hopes the move will see Easynet expand its channel base. "Currently, just 20 per cent of our business goes through the indirect model, but I believe this will grow towards an ideal of 40 per cent. This merger makes sense for our direct and indirect customers, and the channel will benefit," he said.

Rafferty said: "The merger will significantly accelerate the development of both firms. The enlarged group will adopt a sales-led business model built on Easynet's established customer base, but there will also be more opportunities for interested resellers."