Telecom signs deal to acquire Gen-i for $62.5m

11.30am

Telecom today confirmed it had signed a $62.5 million conditional deal with Cullen Investments to acquire its systems integrator Gen-i.

Telecom spokesman Mark Ratcliffe said the acquisition would complement Telecom's information communications technology (ICT) business, Telecom Advanced Solutions (TAS).

"Gen-i is a highly respected organisation whose expertise extends ours," Mr Ratcliffe said in a statement.

The acquisition would provide an "opportunity for growth for both organisations and for the wider ICT services market".

Gen-i has 716 staff across nine locations in New Zealand and Australia, and provides total technology solutions to large corporate and public sector clients.

In the April year, Gen-i had revenue of $155 million and earnings before interest, tax, depreciation and amortisation (ebitda) of $7 million.

It has forecast revenue of about $170 million and ebitda of about $11m for the April 2005 year.

The acquisition of Gen-i was a strategic move for Telcom.

"Telecom's strategy has been to explore ways of further growing its ICT business through a three-pronged approach of organic growth, strategic alliances and acquisitions," Mr Ratcliffe said.

"The acquisition of Gen-i will help to move Telecom and AAPT further into the ICT space in both New Zealand and Australia and fully integrate telecommunications and ICT delivery right to the desktop for our business customers."

Telecom hoped to settle the Gen-i deal by the end of this month.

At 8.50am, shares in Telecom were last traded on Friday at $5.61, having ranged between $4.84 and $5.92 in the past year.

Cullen Investments is part of the Eric Watson business empire.

- NZPA