acquisition of ideal internet

BROAD INVESTMENTS LIMITED
ACN 087 813 090
To: Australian Stock Exchange
From: Broad Investments Limited (ASX:BRO)
Date: 2 June 2006
Subject: Acquisition of Ideal Internet
The Board of BRO is pleased to provide the following information about the recent
acquisition of an Internet Service Provider (“ISP”), Ideal Internet.
BRO subsidiary Broad IP Pty Limited (“BroadIP”), has just completed an agreement for
the acquisition of small NSW-based ISP, “Ideal Internet”, that has a strong and growing
presence in the outer western suburbs of Sydney and the Campbelltown areas.
The acquisition provides BroadIP with a mix of dial-up, DSL and hosting contracts and
creates an opportunity for the company to up-sell its VOIP and broadband services as the
infrastructure becomes available in those areas. This will add considerably to the profit
margins already being achieved from these customers.
The acquisition includes the entire client database, several servers, billing system, CRM
and associated software, but will not involve the transfer of any employees as the
business will be integrated within BroadIP’s own infrastructure, including the transfer of
all hardware to BroadIP’s secure operating centre, achieving further savings on colocation
costs.
Based on the $50,000 cash and six million shares in two tranches to be issued at 5.0 cents
per share for the acquisition, the transaction has been completed at a very favourable
multiple of two times current estimated earnings before interest and tax.
The Board of BRO wishes to advise that it is in discussions with other targeted
acquisitions which, when completed, are expected to add even greater value to the
company’s earnings.
By Order of the Board
Broad Investments Limited