TeamTalk to purchase 67% of CityLink for $12.7 mil
24 November 2006
TeamTalk to purchase 67% of CityLink for $12.7 million
TeamTalk and members of CityLink’s management team have joined forces to purchase CityLink - New Zealand’s number one dedicated fibre optic broadband company.
TeamTalk will contribute $12.68 million in cash and debt in exchange for 67% of the company, with CityLink’s MBO team holding the remaining 33% of shares.
CityLink provides NZ’s simplest, fastest, lowest cost, high speed networking. It offers a range of broadband services including fibre optic links, public LAN services; Wellington’s well-known CafeNet; video over the Internet; and has run around 100km of fibre in Wellington, 25km of fibre in Auckland and a new network about to be completed in Christchurch.
TeamTalk Managing Director David Ware said he was excited to announce the $22.8 million deal, which was the culmination of an extensive three-year search for suitable acquisitions.
“We have very strict investment criteria; it had to be a proven business model, already in profit with excellent growth prospects, and a deal which would allow TeamTalk to maintain an attractive dividend.”
He said the CityLink deal ticked all the boxes, plus the company had a strong committed management team. “It has posted revenue growth of around 20%p.a for the last four years.”
“TeamTalk’s yield, plus CityLink’s growth, makes for a compelling partnership. And it creates a powerful force strategically placed within the ICT sector,” Mr Ware said.