Infratil and Canadian investment partner Brookfield have succeeded in their bid to buy Vodafone NZ.
The pair bought Vodafone NZ for $3.4 billion, Vodafone Group announced over night.
On completion, Vodafone and Vodafone NZ will enter into a partner market agreement, which will include use of the Vodafone brand, preferential roaming arrangements, access to Vodafone’s global IoT platform and central procurement function, and a range of services for the business and consumer markets.
Nick Read, chief executive of Vodafone Group, said an important aspect of the group's strategy is the active management of its portfolio and deleveraging, which the transaction further demonstrated.
"We have always been proud of our Vodafone New Zealand business, which has a great team, and we look forward to a continued close relationship through our partner market agreement," he said.
Infratil went into an NZX trading halt on Friday after news of a possible deal broke. That halt has now been lifted.
Infratil told investors this morning the acquisition "significantly strengthens the cash generative core" of its portfolio.
Vodafone NZ increases Infratil's exposure to long-term data and connectivity growth and complements the acquisition of Canberra Data Centres, it said.
"Telecommunications is critical infrastructure for New Zealand and Vodafone NZ is an integral part of everyday Kiwi life," said Infratil chairman Mark Tume.
"The quality and availability of its networks have a direct bearing on New Zealand's competitiveness and future growth prospects. We are very excited to be a part of Vodafone NZ's next stage of development."
Referencing its 2010 acquisition of Shell's New Zealand downstream assets (now Z Energy), Infratil said it had already successfully demonstrated its ability to reinvigorate a standalone New Zealand entity that was formerly owned by a multinational corporation and create value for our shareholders in the process.
VodafoneNZ chief executive Jason Paris said the deal was a "great outcome for New Zealand consumers and businesses,and one that marks a new era".
"We’ve got the backing of two new world class and long-term investors plus we can continue to tap into Vodafone’s global expertise, including all the services our customers value such as global roaming, global procurement and the world’s largest internet of things platform," he said.
“The key things will stay the same – our strategy, our people, our management team, our brand, and our ability to tap into Vodafone’s global products and services.
"What changes is our owners, who back our ambitious plans for New Zealand and who share our views on the importance of creating sustainable, long-term profitability in order to reinvest in the future. So it really is the best of global and local.
“Customers will benefit as we look to maximise the opportunities presented by new and emerging technologies, such as IoT, 5G, artificial intelligence and data analytics. And we know we have a lot of work to do to deliver more consistent customer service so we’ll focus even more on getting it right for our customers, first time, every time.”
Vodafone NZ generated revenue of $2.0 billion and underlying EBITDA of $463 million for the 12 months to 31 March 2019.
Infratil said the acquisition value implied an enterprise value EBITDA multiple of 6.9 times to 7.4 times and was expected to deliver strong cash flow to support current and future growth opportunities.
Vodafone Group has been seeking a sale for at least a couple of years.
In 2017, Vodafone Group tried to sell its NZ unit to Sky Network Television for NZ$3.44 billion but failed to get regulatory approval. It then began to target an NZX listing for 2020, grooming the company for that through cost cutting.
The transaction is subject to regulatory approvals, with completion anticipated during Vodafone’s 2020 financial year.