M2 acquires assets of Clear Communications: Economy Roundup

M2 Telecommunications Group has acquired the business assets of Clear Telecoms in a $24.5 million deal, including all customer contracts, operating systems, brands and intellectual property.

The acquisition will see M2’s revenue surpass $500 million a year.

In a statement, M2 says the deal involves a net cash consideration of $24.5 million for the assets, which will be payable over three tranches. The first will be conducted immediately, with a second in September and a third in March 2012.

Managing director and chief executive Vaughan Bowen said in a statement the move strengthens the company’s position in the SMB telco market.

“The addition of the Clear business to the M2 Group is another extremely positive step in further expanding our presence in the small and medium business telco market,” Bowen said.

“The Clear customer base is not only sizable but is of a very high quality. We see considerable opportunity to add further value to the existing customers and in doing so expand both Clear’s revenues and earnings contribution over the coming years.”

M2 expects the acquisition will add $8 million in EBITDA in the 2011-12 financial year. All of Clear’s senior operational management will stay on, with extended offers of employment given to all Clear employees.

House price index rises 0.7% in December quarter

Housing prices increased by 0.7% during the December quarter, according to the latest figures from the Australian Bureau of Statistics.

However, the figures also show prices increased by just 5.8% over the year.

On a quarterly basis, Canberra recorded the highest gain at 1.9%, followed by Sydney at 1.6%, Melbourne at 1.3%, Adelaide and Hobart at 1.1% and Brisbane at 0.7%. Darwin prices remained flat, while Perth prices dropped by a shocking 3.2%.

Over the year, Melbourne recorded the largest gain at 10.89%, followed by Sydney at 7.4% and Canberra at 6.5%.

More modest figures were recorded in Adelaide where prices grew by 3.5%, followed by Darwin at 1.7%, Brisbane at 0.7% and Hobart at 1%. Perth prices fell by 2%

Manufacturing contracts for fifth consecutive month

Activity in the Australian manufacturing sector contracted for a fifth consecutive month due to a rundown in inventories, according to the latest Australian Industry Group-PricewaterhouseCoopers performance of manufacturing index.

The index gained 0.4 points to 46.7, but this is still well under the 50 point level separating expansion from contraction.

The sub-index for inventories saw a drop to 38.9, although the index of production actually gained 3.7 points to 50.3.

“Poor performance in sectors such as the basic metals and fabricated metals relate in part to the ongoing weakness in the construction sector,” Australian Industry Group chief executive Heather Ridout said in a statement.

“The impact of the Queensland floods is difficult to factor in at this time but could give support to activity in these sectors down the track.”

Shares flat despite Wall Street declines

The Australian sharemarket has opened flat this morning despite gains on Wall Street where strong corporate reports are bolstering hope in an economic recovery.

The benchmark S&P/ASX200 index gained 11 points or 0.25% to 4765.7 at 12.10 AEST, while the Australian dollar gained to US99c.

NAB shares gained 0.3% to $24.74, while Commonwealth Bank shares also rose 0.2% to $52.55. Westpac rose 1% to $23.21 as AMP rose 0.2% to $5.36.

Pacific Brands refinances debt

Pacific Brands has refinanced $500 million of syndicated debt facilities, with the company agreeing to a revolving credit facility of $225 million which is set to mature on January 31, 2014.

The company said in a statement the lenders all agreed, with the deal to improve the company’s liquidity.

Wall Street shares close higher

Shares on Wall Street have gained ground as strong corporate earnings, specifically from Exxon Mobil, have bolstered hope in the country’s economy.

The Dow Jones Industrial Average gained 68.23 points or 0.58% to 11,891.93.