TalkTalk, a wholly owned subsidiary of Carphone Warehouse Group Plc, has acquired the UK operations of internet service provider Tiscali for £236 million.

TalkTalk, a wholly owned subsidiary of Carphone Warehouse Group Plc, has acquired the UK operations of internet service provider Tiscali for £236 million. The transaction will be funded from the group’s existing debt facilities. The deal is expected to be immediately earnings enhancing, lifting earnings per share by ten per cent.

Tiscali is the UK’s fifth-largest provider of internet services, offering broadband and IPTV to 1.45 million subscribers. This strategic transaction will swell the number of TalkTalk subscribers to 4.25 million and enables the company to make cost savings of between £40 million and £50 million through its new customers, plans to simplify and integrate the network, and integrate billing systems by March 2011.

Carphone Warehouse CEO Charles Dunstone said: “We are delighted to be acquiring Tiscali’s UK business. We know the business well and the fit with TalkTalk is perfect. It also delivers clear shareholder value, with significant enhancement to this year’s earnings per share and substantial synergies to be achieved next year and beyond.”

The gross assets of Tiscali’s UK business totalled £457 million last year, generating pre-tax profit of £9.7 million. Tax losses, estimated at more than £200 million, will be inherited as part of this transaction.