Tuesday 14th May 2019
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Vodafone Group has sold Vodafone New Zealand to a consortium comprising Infratil and Canada's Brookfield Asset Management for an enterprise value of $3.4 billion, it said in a press release.
The deal is subject to regulatory approvals and completion is anticipated during Vodafone Group's 2020 financial year, it said.
Upon competition, Vodafone Group and Vodafone New Zealand will enter a partner market agreement, which will include use of the Vodafone brand, preferential roaming arrangements, access to Vodafone’s global IoT platform and central procurement function, and a range of services for the business and consumer markets.
“An important aspect of our strategy is the active management of our portfolio and deleveraging, which this transaction further demonstrates." Vodafone chief executive Nick Read said. "We have always been proud of our Vodafone New Zealand business, which has a great team, and we look forward to a continued close relationship through our partner market agreement."
Infratil, which is managed by Morrison and Co, was put on a trading halt by the New Zealand stock exchange on Friday when it announced it was in talks with another party to buy Vodafone's New Zealand business. The stock last traded at $4.60.
Brookfield Asset Management has over US$365 billion in assets under management.
According to Vodafone Group, the deal was struck at an implied multiple of 7.3 times adjusted March-year earnings before interest, tax, depreciation and amortisation and 16.2 times adjusted operating free cash flow.
It said the New Zealand business had revenue of $1.99 billion in the year to March 31, adjusted ebitda of $463 million, capital expenditure of $253 million and an adjusted operating free cash flow of $210 million.
As of Dec. 31, 2018, Vodafone New Zealand had a mobile customer base of approximately two million subscribers and a fixed customer base of approximately 500,000 subscribers.
In November, Vodafone New Zealand's new chief executive Jason Parish said the plan was to float the company and the target for the initial public offering was 2020. That followed an earlier failed bid to sell the business for $3.44 billion to Sky Network Television. That was blocked by the Commerce Commission in early 2017.
The latest deal comes after the Australian Competition and Consumer Commission recently blocked a A$15 billion merger of TPG Telecom and Vodafone's Australian business, arguing it would reduce competition.
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