By ADAM GIFFORD
Listed telecommunications company Newcall Group has made a conditional offer for Auckland-based internet service provider Iprolink.
The two companies are already working closely, with Iprolink designing the site for Newcall's internet service, Newnet.
Newcall chief financial officer Guy Pierce said the deal involved an even split between cash and shares,
but he would not reveal a price. The option period ends on December 20.
Mr Pierce said Newcall, which listed on the New Zealand Stock Exchange in September through a reverse takeover of New Zealand Salmon, wanted to expand into internet services and e-commerce.
It offered telecommunication services, including national and international tolls and faxes, land to mobile services, internet access and calling cards.
He said Iprolink's customer base, which was weighed more towards small to medium-sized businesses, fitted Newcall's target market.
"In their customers Newcall and Iprolink have a lot of synergy but not much overlap, so we will be able to offer services to them."
Iprolink's quality of service and its internal culture made it an attractive purchase, as well as its stable staff.
"We see that as a big asset. We have looked at the companies around and we know where the good people are," Mr Pierce said.
"We get on well and the skill set is complementary. They are people we could trust."
Newcall technology director Grant Crawshay said the companies were evaluating e-commerce systems for smaller companies trading over the internet.
While larger companies could afford large and expensive applications to run e-commerce sites, options for small-to-medium companies were limited.
"There is a huge opportunity there. E-commerce is happening, but many of the small-to-medium companies we deal with are gun shy.
"They know they need an internet presence, but they want to keep working with their existing systems. We want to make it easy for them to convert without having to set up their own IT infrastructure," Mr Crawshay said.
Jim Benson, Iprolink managing director, said Newcall's dynamic and innovative approach to telecommunications was the deciding factor in the sale.
Newcall's principal shareholder is CTW Beta, a subsidiary of Asia Pacific Wire and Cable Corporation.
