Telecoms group Imagine has bought smaller rival Cinergi for a "seven-figure sum", it emerged yesterday. Imagine confirmed yesterday that it bought Cinergi, which supplies broadband and conventional telecoms services to 8,000 residential customers, and a small number of businesses, within the last two weeks.
The deal follows Imagine's purchase last month of a substantial telecoms business in the Netherlands, for which it paid €18 million. The company did not reveal what it paid for Cinergi, but sources estimated it would have been a "low seven-figure sum".
As a result of its recent expansion, Imagine is now primed to make revenues of close to €60 million this year in Ireland, while its Netherlands operation will bring total turnover close to €80 million. The Cinergi purchase brings Imagine's subscriber base to over 70,000, which includes 7,000 businesses in Ireland.
Imagine provides telecoms, broadband and internet dial-up services to its customers, and is the third-biggest player in the Irish market after Eircom and BT.
The company's revenues reached €20 million in 2005 and it doubled that figure last year. A recent survey commissioned by communications regulator ComReg shows Imagine is the second biggest supplier to small and medium-sized businesses.
Cinergi primarily operates as a "reseller", which means it buys services at wholesale rates from dominant fixed-line player, Eircom, and sells them on at a margin to its customers. The profits from reselling such services have been squeezed in recent years, and as the industry slowly begins to liberalise, it is likely that many bigger players will absorb these operators.
The Imagine takeover will allow Cinergi to offer a broader range of services to its customers.
An Imagine spokesman said yesterday it had sought a suitable acquisition in Ireland for some time, and looked at low-cost reseller Tele2 when it came on the market last year, but decided against buying it. Cinergi management, led by managing director Pat Gilna, subsequently approached Imagine and the parties agreed a deal.
