Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Vocus agrees to buy FX Networks for $115.8M including debt

Vocus agrees to buy FX Networks for $115.8M including debt, paying cash, shares

By Jonathan Underhill

July 2 (BusinessDesk) - Vocus Communications, the ASX-listed telecommunications company, agreed to buy FX Networks for $115.8 million including debt, gaining a New Zealand fibre optic cable network operator it says will add to earnings in its first year. Vocus shares jumped to a record on the ASX.

Vocus will pay $62 million, with up to 33 percent paid in cash and the balance in new Vocus shares, and assume $53.7 million of debt, the company said in a statement to the ASX. That would see it issue between 8.8 million and 13.1 million Vocus shares at a price of A$4.40 apiece.

Based on results for calendar 2013, the acquisition would have more than doubled Vocus's annual revenue to A$136 million and lifted earnings before interest, tax, depreciation and amortisation to A$36.7 million. FX Networks made a net loss of A$900,000 last year because of interest costs from a related party debt, according to a Vocus presentation on the deal.

"There exists an exciting opportunity in New Zealand to mirror the success we have had in Australia as the only integrated provider of fibre, internet and data centres," Vocus chief executive James Spenceley said in a statement. "The FX acquisition adds the missing fibre piece to our existing data centre and internet investment in New Zealand."

Vocus would fund the acquisition through a combination of existing cash, a debt facility with Commonwealth Bank of Australia and Vocus scrip and will end up with about A$40 million of unusued debt facility it may use "to continue to seek growth opportunities."

Shares of Vocus rose about 6 percent to A$5.05 on the ASX, valuing the company at about A$439 million, and have surged 45 percent this year. The shares are rated a 'buy' based on seven analysts polled by Reuters.

FX Networks owns and operates a national inter-city fibre optic network in New Zealand and has more than 3,000 clients, according to its website. The company has laid 4,200 kilometres of fibre and has 29 Tb of national capacity, it says.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Oceans: NOAA Declares Third Ever Global Coral Bleaching Event

As record ocean temperatures cause widespread coral bleaching across Hawaii, NOAA scientists confirm the same stressful conditions are expanding to the Caribbean and may last into the new year, prompting the declaration of the third global coral bleaching event ever on record. More>>

Scoop Business: A Decade Of Government Pre-Seed Investment

More publicly-funded science is being commercialised after a decade of government ‘pre-see’d investment, according to an independent review. More>>


Solid Energy: Plan To Shut Unprofitable Huntly East Mine

Solid Energy, the state-owned coal miner in voluntary administration, plans to shut down its unprofitable Huntly East mine and lay off 65 staff after deciding the site stands "no chance whatsoever" of finding a buyer. More>>


E Tū: Merger Creates NZ's Biggest Private Sector Union

E tū has been created by the merger of the Engineering, Printing and Manufacturing Union and Service and Food Workers’ Union. It represents more than 50,000 working New Zealanders in industries as diverse as aviation, construction, journalism, food manufacturing, mining and cleaning. More>>


Internet: NZ Govt Lifts Target Speeds For Rural Broadband

The government has lifted its expectations on faster broadband speeds for rural New Zealand as it targets increased spending on research and development in the country's information and communications technology sector, which it sees as a key driver for export growth. More>>


Banks: Westpac Keeps Core Government Transactions Contract

The local arm of Westpac Banking Corp has kept its contract with the New Zealand government to provide core transactions, but will have to share peripheral services with its rivals. More>>


Science Investment Plan: Universities Welcome Statement

Universities New Zealand has welcomed the National Statement of Science Investment released by the Government today... this is a critical document as it sets out the Government’s ten-year strategic direction that will guide future investment in New Zealand’s science system. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news