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Mercury sells Metrix smart metering business

Mercury NZ Ltd has today announced the sale of its smart-metering business, Metrix, to intelliHUB Group for a cash consideration of $270m.

Mercury Chief Executive Fraser Whineray says the sale releases capital and resources, simplifies the company and provides a tremendous opportunity for Metrix employees.

Metrix has been a strong performing business, operating and branded separately from Mercury’s core generation and retail activities. It is one of the country’s leading smart metering solution providers, managing over 460,000 meters with household and commercial connection points. These features made it attractive to a focused owner looking to advance the role of smart metering technologies in New Zealand and Australia even further, Mr Whineray said.

Mercury’s retail business has metering service agreements with all significant metering service providers. Under the sale agreement Mercury’s retail business will continue to be a key partner of Metrix, benefitting from the metering services and innovation that Metrix will provide under its new ownership.

New natural owner
“The sale price achieved is recognition of the expertise, scale and opportunity Metrix represents. While Mercury had its own strategy for Metrix, negotiations with intelliHUB Group have presented an opportunity that is timely for both parties,” Mr Whineray said.
“IntelliHUB is a natural owner for the business given its experience and growth in Australia, and its expansion into New Zealand, partnering with Trustpower to roll-out smart meters across its customer base.”

IntelliHUB’s CEO, Adrian Clark, said he was excited by the opportunity provided by Metrix.

“Metrix’s large installed meter base, deep customer relationships and innovation platform, make this a natural acquisition for intelliHUB. It is also clearly aligned to our strategy of focusing on growth and innovation in smart metering services,” Mr Clark said.

Transaction details
The transaction is expected to settle on 1 March 2019. The annualised reduction to EBITDAF from the sale is forecast to be $28m. Further details are provided in the accompanying presentation.

Mercury’s proceeds from sale will be applied to the repayment of net debt in the first instance. Further application of proceeds will be considered with the company’s FY2019 results.
Metrix’s Chief Executive Matt Olde will remain as a Mercury executive with an initial focus of ensuring a successful Metrix transition to intelliHUB. All other Metrix employees transition as part of the sale.

Flagstaff Partners and Chapman Tripp acted as financial and legal advisers to Mercury on this transaction.

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