Australian telecommunications company, Vocus Communications, is filling the "missing fibre piece" in its NZ play through the purchase of FX Networks for $A107.7 million (about $NZ115.8m).
FX is a Wellington-based company running a fibre optic network spanning 4132km of ducted fibre cable across both the North and South Islands of NZ, servicing 365 customers.
The agreement is expected to be completed early in the second quarter of fiscal 2015. FX shareholders will receive notice of the meeting in late July, with the extraordinary general meeting (EGM) to be held in August.
The acquisition will be funded via cash, a senior debt facility with the Commonwealth Bank of Australia, and Vocus shares to FX shareholders.
The latter will allow FX shareholders to accept a combination of shares and/or cash up to $A18.97 ($NZ20.5m). The transaction will require the acceptance of more than 90 per cent of FX shareholders. At time of writing, 77.1 per cent have indicated they will accept the offer.
Vocus claims the buy will make it the leader in trans-Tasman telecommunications and datacentres, and the third largest network operator in NZ.
The company expects FX to deliver $A12.5m ($NZ13.5m) to $A13.42m ($NZ14.5m) of earnings before interest, tax, depreciation and amortisation (EBITDA), excluding transaction and integration expenses in the first 12 months post-acquisition.
"FX has built an excellent fibre asset reaching all major population centres across NZ," Vocus chief executive officer, James Spenceley, said.
"There exists an exciting opportunity in NZ to mirror the success we have had in Australia as the only integrated provider of fibre, internet and datacentres."
For FX, the acquisition allows it to undertake what it brands the next phase of its corporate development.
"We have fundamentally completed the build of NZ's most modern fibre network," FX CEO, David Heald, said.
"The addition of Vocus' financial strength and other NZ assets together with a shared culture focused on delivering exceptional outcomes to customers, means this transaction will give a positive outcome for both shareholders and customers alike."
Financial conversions accurate at time of writing.
More to come.