New Zealand's TeamTalk makes $34.7M bid for Farmside
New Zealand's TeamTalk, the company that operates the CityLink fiber broadband service, on Friday announced a deal to acquire Farmside Group for up to NZD 42.1 million (USD 34.7 million), a move it says will enable it to expand its presence in the rural market.
Under the terms of the agreement, the Wellington-based service provider will purchase Farmside with an initial payment of NZD19 million (USD16 million) in cash and NZD12 million (USD 10 million) million in TeamTalk shares, with an additional NZD 7 million (USD 6 million) million cash and NZD 4.1 million (USD 3.4 million) in potential 'earn-outs' (which are directly determined by future profits) over the ensuing 12 months.
Shareholders of Farmside will meet on Dec.11 to discuss whether or not to support the deal.
"The purchase is an opportunity to grow both businesses by building on what each does best," TeamTalk managing director David Ware said in a statement. "I am confident our shareholders will see value in this acquisition and we look forward to welcoming the Farmside staff and customers to TeamTalk."
If the deal gets shareholder approval, Farmside will become a subsidiary of TeamTalk and retain its headquarters in Timaru. TeamTalk has also invited Farmside to appoint a director to its board of directors.
By purchasing Farmside, TeamTalk will nearly double its revenue. In the 12 months ended June 30, Farmside reported NZD 25.4 million (USD 21 million) in sales.
TeamTalk said it "anticipates implementing initiatives for cross selling and other revenue enhancing programmes."
But Farmside is just one of many acquisition targets that TeamTalk may pursue this year. During its annual meeting last week, the company said that it is thinking about acquiring other telecom providers that will complement its business model.
- The New Zealand Herald has this article
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