2degrees is widely expected to announce the acquisition of Christchurch-based Internet Service Provider Snap Internet, for a rumoured fee of $26 million.
By revealing a “major development regarding the future of the business” to media at 10am Monday March 23, key industry figures believe the telco will officially confirm the deal with the 100% kiwi owned and operated business, which includes $10 million in cash.
Billed as the “worst kept industry secret” by sources close to Computerworld New Zealand, negotiations between the two companies have been ongoing for some time, having formed a marketing partnership offering discounts to customers who buy broadband from Snap, and mobile services from 2degrees.
So in that respect a potential merger is nothing new, with the acquisition predicted by Computerworld New Zealand columnist Brendan Ritchie, CEO of DTS, in January, who forecasted strong market consolidation across New Zealand and Australia.
With the deal likely to be public knowledge in the coming days, 2degrees CEO Stewart Sherriff previously confirmed the company’s plans to move into the fixed-line market, adding further weight to the widely-held industry belief that an acquisition is imminent.
Led by CEO Mark Petrie from Christchurch, Snap Internet is “100% kiwi owned and operated”, providing broadband and home phone services across the country.
In being honoured as the TUANZ ISP of the year for three years running, the company is making a big play within the broadband market, offering a range of home, work and enterprise services to customers.
Given a deal is close, the acquisition will also put to bed strong rumours that the telco was putting up the ‘For Sale’ sign, a move completely rejected by Sherriff during an exclusive interview with Computerworld New Zealand in September last year.
“There’s no ‘for sale’ sign up,” Sherriff confirmed at the time. “As for 2degrees acquiring companies? It is always a possibility. I cannot rule out that there might be an acquisition.”
Six months on it appears that possibility has now become a reality.
For the official release, click here