Vocus agrees to buy FX Networks for $115.8m

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Telecommunications company Vocus is buying fibre-line provider FX Networks in a $115 million deal and says it will become New Zealand's third largest network operator if the sale goes through.

ASX-listed Vocus announced the deal to buy FX Networks, which owns a 4132 km fibre internet network across the North and South Island.

Vocus was founded in 2008 and provides wholesale services to retail internet companies and other customers. It has data centres or co-location facilities in Sydney, Melbourne, Perth, Auckland and Christchurch.

FX presently has 365 customers, Vocus said today, "including 43 of the Top 100 companies in New Zealand".

The deal was valued FX at $115.8 million and Vocus said in the first year after the sale FX is expected to make $13.4-14.5 million of earnings before interest, tax, depreciation and amortisation.

The deal is conditional on getting approval from more than 90 per cent of FX shareholders. Vocus said today it had received agreements from 77.1 per cent of FX shareholders indicating they will accept the offer.

FX shareholders may accept a combination of shares and/or cash, Vocus said.
Vocus said the deal will means it would be the third largest network operator in New Zealand.

"FX has built an excellent fibre asset reaching all major population centres across New Zealand. There exists an exciting opportunity in New Zealand to mirror the success we have had in Australia as the only integrated provider of fibre, Internet and data centres. The FX acquisition adds the missing fibre piece to our existing data centre and Internet investment in New Zealand," Vocus chief executive James Spenceley said.