In a deal that as of Thursday had only been revealed to customers, Primus Telecommunications Canada Inc. has bought all assets of Passport.ca.
Toronto-based Passport was an ISP that also offered Web hosting along with virtual private networking (VPN), voice over IP (VoIP)- based videoconferencing solutions, and point of sale (POS) and debit solutions. All of Passport’s customers, including those in collocation facilities have been or are in the process of being transitioned to Primus.
As the deal was made last Friday, Primus was yet uncertain as to whether layoffs would occur.
For the Virginia-based Primus, the acquisition was a natural move considering both companies offer nearly identical services. Primus made its way into Canada nearly five years ago when it bought London Telecom. A Primus spokesperson left little doubt as to why the deal was made to purchase Passport.
“Primus provides all the services that Passport did, so it was a pretty good fit that way. It added to our customers in some of those areas (and) it was more of a customer acquisition that we were looking for,” said Edmund Chislett, president at Primus Telecommunications in Toronto.
Chislett added that it is hopeful the deal will band together all the service offerings, including long distance and local services beyond the Internet.
With an established residential Internet customer base, the procurement is likely to strengthen Primus’ business user base, since Passport’s clients included an array of small- to medium-sized business customers.
One industry analyst said that the move by Primus is interesting in that it represents a very targeted purchase, as the company is acquiring customers and services it wants to provide to grow its business. But, he cautioned, history is not on Primus’ side.
“If you look at other companies that have gone down the road of growing their Internet businesses by acquisition, for the most part they’ve been unsuccessful primarily because (the philosophy has been) to go out and buy as many customers as you can as quickly as you can,” said Mark Quigley, research director at the Yankee Group in Canada in Ottawa.
He added that the VPN and VoIP aspect of the new Primus has the potential to be a compelling business.
Primus Telecommunications can be reached at http://www.primustel.ca.