Australian service provider M2 Telecoms says that it has agreed to buy the Australian operations of Primus Telecommunications Group (NYSE:PTGI, news, filings). Primus has been considering strategic alternatives since October. The company obviously has found the optimal solution to be breaking up the assets in order to appeal to local buyers, which is what I suggested would probably happen at the time.
Primus's Australian assets include the national iPrimus brand, metro fiber rings in the country's top five metro areas, and about A$280M in annual revenues, or just under 30% of the total business. The deal will cost M2 A$192.4M (US$199), which it will partially fund through a rights offering for A$83.1M.
It's M2's second acquisition already this year, following February's deal for alternative Australian Time Group. With the NBN project now in full swing, Australian telecommunications marketplace looks very dynamic as providers of all sizes jockey for position in the new market structure.
That leaves Primus with its substantial Canadian business, a smaller piece in the US, plus its low margin wholesale carrier business. It seems very likely that further sales will follow, since the Aussie piece was perhaps the most viable as an independent company. Now that foreign ownership restrictions for smaller Canadian telecommunications firms have been relaxed somewhat, Primus's prospects for selling the remaining US/Canada part of its business for a good price seem brighter. That footprint includes some 8 data centers in addition to a national CLEC-type presence.
I'm still not sure where the wholesale business winds up though. Much of that derives from from the Arbinet deal, one which puzzled me a bit at the time (and still does). But given that they seem to be breaking things up, perhaps the best fit for the international carrier business would be someone like Tata or perhaps Inteliquent.
EDIT: Here's the PR from Primus itself now.