Shares in Amaysim have jumped by nearly 20 per cent after the mobile services provider acquired Brisbane-based prepaid player Vaya to boost scale.
The acquisition of privately-owned Vaya for $20 million is Amaysim's first since listing on the Australian share market in July 2015.
Vaya, which was established in 2011, provides mobile voice, text, data and fixed-line broadband services under the Vaya, Live Connected and Zen Connect brands.
It is purely an online business and has no retail presence.
Vaya is focused on the discount mobile market in Australia and has customer service centres in the Philippines and an outsourced service centre in India.
Vaya's subscriber base of 140,000 has doubled in the past two years.
"This is a very exciting acquisition for Amaysim," chief executive Julian Ogrin said on Monday.
"The acquisition of Vaya is a strong strategic fit with our online mobile model.
"It accelerates and complements our organic growth by adding 140,000 subscribers, and it is materially accretive to our profitability."
Amaysim investors were upbeat about the acquisition, sending the company's shares up 45 cents to close at a record high of $2.75.
Amaysim said Vaya had been run as a true low-cost operator and had been very successful in the market segment offering monthly plans for under $30.
Mr Ogrin said the acquisition of Vaya would broaden Amaysim's range of products, and increase the group's scale and relevancy.
"It will fast-track our platform, web and app development opportunities, with a strategic footprint in the Philippines," Mr Ogrin said.
Both Amaysim and Vaya are known as mobile virtual network operators, meaning they don't own any telco infrastructure but instead use the Optus 4G Plus network.
Under the deal to buy Vaya, Amaysim will assume $50 million of Vaya's liabilities to Optus.
The $20 million acquisition fee includes a $5 million cash payment and the issue of $15 million worth of Amaysim shares over 12 months.
Amaysim said the acquisition of Vaya would make a minimal contribution to Amaysim's statutory earnings in fiscal 2016 after integration and transaction costs, and consulting fees.
But Vaya is expected to make a material contribution in fiscal 2017.
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