Tiscali acquires Pipex broadband business

Pipex has sold its broadband and voice assets

Internet service provider Tiscali has acquired the broadband and voice divisions of UK rival Pipex for about £210m.

Pipex will now focus on its three remaining divisions, which include web hosting, business services and WiMax wireless services.

Tiscali has about 1.4 million broadband customers in the UK and that will now increase by a further 570,000, with about 430,000 new voice customers.

Pipex’s broadband and voice division generates about £230m in sales, and profits of almost £14m, says Pipex executive chairman Peter Dubens.

‘Over the past three years, Pipex has successfully transformed the scale and quality of its broadband and voice customer base,’ he said.

‘In the consolidating UK market, this announcement crystallises value for shareholders and ensures that Pipex’s customers will continue to receive competitive, high quality services.’

The sale follows a strategic review of the business announced in March. It had attracted interest from broadband rivals such as BT, Sky and Virgin Media, but most dropped out of the auction.

Pipex believes it will benefit from focusing on other areas, which have shown significant growth in recent years.

Web hosting has generated 90 per cent customer growth, while the business services division has seen growth in high-end hosting and leased-line sectors.

Pipex Wireless is also focusing on the commercial launch of the business later this year. During 2008, commercial WiMax services will be made available in a number of cities as the network expands in the west midlands and the northwest.