Business Serve Acquires Telecommunication Group

One of the UK's leading ISPs, Business Serve plc has acquired the telecommunication group of affiliated companies, Pipemedia, which comprises Pipemedia Limited, Pipecall Limited and Pipemedia Communications Limited.

Pipemedia is one of the UK's market leaders in the provision of Voice Over Internet Protocol (VoIP) and broadband telephone services to both corporate and carrier customers. Its acquisition enables Business Serve to transform into a converged communications provider spanning both the telecommunication and ISP marketplace, as well as providing immediate access to a new and rapidly growing customer base.

"In the same way this emerging technology has transformed the USA and Japanese telecoms market, it is set to do the same for the UK, which makes for an exciting future for Business Serve."

Business Serve has acquired Pipemedia for an initial consideration of £300,000 together with 692,841 ordinary shares of 1p each. In addition to the initial consideration, deferred consideration of up to a maximum of £1.5 million, settled equally between cash and shares, may become payable over the next two years, should Pipemedia achieve certain performance targets.

Subscribers to Pipecall pay a minimal set-up fee and a low monthly line rental charge.  Business Serve anticipates that users will be able to make cost savings of up to 75% on their traditional landline services. Calls between Pipecall subscribers are free.

Based on unaudited management accounts Pipemedia had revenues of £2.64 million, a loss before tax of £122,000 and net assets of £150,000 as at May 31 2004.  For the first three months of the year to 31 August 2004, Pipemedia's unaudited management accounts showed a profit before tax of £45,000 and net assets of £110,000.