Australian telecoms provider M2 is back on the acquisition trail with a NZ$250m (US$188m) bid for New Zealand’s third-largest ISP Call Plus.
The group has secured binding agreements to buy 100% of its two units – Call Plus Group and 2Talk Limited – in…
Australian telecoms provider M2 is back on the acquisition trail with a NZ$250m (US$188m) bid for New Zealand’s third-largest ISP Call Plus.
The group has secured binding agreements to buy 100% of its two units – Call Plus Group and 2Talk Limited – in a deal with an indicative EBITDA valuation multiple of about 5.6%.
It is being funded through new fully underwritten multi-year loan facilities, expected to give M2 pro forma leverage of about 2x net debt / FY16 EBITDA, and underlying EPS accretion for that year of approximately 15%.
Geoff Horth, M2’s CEO, said: “This is a substantial, highly earnings accretive transaction, which again illustrates M2’s commitment to continue to increase returns to our shareholders, via both organic and acquisitive expansion.
“M2 will be maintaining Call Plus as a self-contained operating business, thus presenting minimal integration risk or distraction to M2’s aggressive growth ambitions in Australia.”
Call Plus was established in 2000 and claims to have around 600 staff with a growing base of more than 400,000 services across consumer, business and wholesale market segments.
These are the same markets that M2 services in Australia, accounting for 55%, 33% and 9% of its revenues as at June 2014, respectively.
Australia-listed M2 was founded a year before Call Plus and, between 2009 and 2013, it had snapped up telecoms services firms Dodo & Efftel, Primus Telecom, and Commander.
It expects to close its latest acquisition on or before 30 June 2015, subject to customary conditions including approval by the NZ Overseas Investment Office.
Goldman Sachs is M2’s exclusive financial adviser, with Allens acting as legal adviser, for the deal.
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