Looking back at the top 15 M&A deals in NZ during 2017
In 2017, merger and acquisitions fever reached new heights in New Zealand, with a host of big name deals dominating the headlines. Reseller News recaps the most important transactions of the Kiwi channel during the past 12 months.
Apple bought wireless charging technology developer PowerbyProxi in October, a company spun out of Auckland University research in 2007, for an undisclosed sum. PowerbyProxi attracted previous international investment from the likes of Samsung after developing around the Wireless Power Consortium's future Qi wireless charging standard. The company is owned by a who's who of local and international investors led by VC fund Movac with 20 per cent and founder Fady Mishriki with 18 per cent. In 2013, Apple's arch rival in mobile phones, Samsung, invested $4 million in the company. It is currently listed as owning nearly 10 per cent of PowerbyProxi's shares. PowerbyProxi designs and develops high efficiency and high density wireless power transfer technology for mobile phones, rechargeable batteries and industrial uses.
TPT Group continued its recent acquisition spree in December, buying Auckland based IT technology services company, Sentinel Technologies, while signalling that more buyouts are expected. Sentinel delivers a broad range of ICT services including cloud, hardware procurement, back-ups, data recovery, cyber security and advisory services.
Spark signed an agreement to purchase all shares in Digital Island in November, a New Zealand-based business telecommunications provider. In supplying a range of wholesale services to Digital Island for over 10 years, the deal is relatively small by Spark’s standards, but has the potential to represent a “smart, tactical investment” for the telco giant.
Australia's CSG quietly acquired award-winning Microsoft partner pcMedia Technologies. In a filing to the Australian Securities Exchange (ASX) CSG said it had bought Blenheim-based pcMedia for NZ$2 million, with $300,000 paid in cash and $1.7 million to be paid as earn-outs over the next three years. The June transaction saw CSG, which in New Zealand used to operate under the brand Konica Minolta, gain 9200 Technology as a Subscription seats deployed by pcMedia locally. It has also gained pcMedia's other local service business lines.
Fortlock Group acquired Wellington-based technology services company Comsmart in November, as part of its strategy to broaden its range of business services and solutions. Headquartered in Auckland, Fortlock is a provider of operational and IP network based security management solutions, delivering consultancy and support across retail, industrial, government, healthcare and commercial organisations in New Zealand. Terms of the acquisition will see the business expand market reach and strengthen its professional IT and converged security solutions capabilities.
Vodafone stepped in to gazump industry rival Spark in March, reaching an agreement with TeamTalk to acquire 70 per cent of the shares in BayCity Communications for $10 million in cash. BayCity Communications and its wholly owned subsidiaries (trading as Farmside) own and operate TeamTalk’s rural broadband and satellite business. Confirming the deal less than 24 hours after TeamTalk wholly rejected a "predatory" offer from Spark, the transaction included a put option that enables TeamTalk to sell its remaining 30 per cent to Vodafone for $3 million at any time in the next three years. In addition, Vodafone holds a call option which enables it to acquire the remaining 30 per cent of the shares in Farmside for $3 million in certain circumstances.
Internet service provider Voyager Internet bought local internet phone services company Conversant in September. The deal gives Voyager immediate access to Conversant's voice technology platform. Founded by entrepreneur Cameron Beattie in 2004, Conversant have been delivering VoIP solutions in New Zealand for over 12 years, and in Australia since early 2016. The sale price was not disclosed.
Enprise Group acquired a 47 per cent equity stake in Kilimanjaro Consulting for $3.2 million in September, as the New Zealand-based business accelerates regional growth plans. Based in Sydney, Kilimanjaro Consulting is one of Australia’s largest MYOB enterprise resellers, specialising in consultancy and implantation services.
UK-based Skipton Building Society bought-out minority shareholders in Jade Software in July, while Jade Logistics was spun out under separate ownership Companies Office records showed Skipton Investments lifted its stake to 99.9 per cent from 56 per cent, acquiring the shares of 61 other entities including those of founder Gil Simpson, who still held a small 2.2 per cent stake. Jade's logistics business has also been spun out as part of the changes and is now owned by USA Health, formerly a 26 per cent shareholder in Jade Software.
Redundancies followed the merger of two of Southland’s largest IT service providers, Focus Technology Group (NZ) and Computer Group NZ (CGNZ), in May. The two merged after CGNZ sold its Auckland and Tauranga operations to Spark. Focus has now purchased the CGNZ’s Southland assets. CGNZ was a partner of and traded as Spark Digital in providing IT services to the corporates in Auckland, Bay of Plenty and Southland.
Telco retailer Spark signed a conditional agreement to acquire Auckland-based marketing automation provider Ubiquity in June. Spark said the move will blend the marketing software strengths of Ubiquity with the Spark’s big data and analytics software business Qrious. Spark said Ubiquity’s agency campaign services and its proprietary marketing automation platform Engage would be enriched over time by Qrious’ geo-data and analytics capabilities.
Connect NZ merged with audio-video design and consultancy company ITAV in July, in a move designed to bolster the advisory capabilities of the cloud communications specialists. Having originated from a value-added reseller background, ITAV operates within the AV integration market, evolving from an integrator into a consultancy focused business.
Eyeing trans-Tasman opportunities, unified communications specialist Pyrios bought 30 per cent of Microsoft integrator UC Logiq in November. Pyrios CEO Robyn O’Reilly said the investment was part of an alliance to offer Microsoft Skype for Business services to clients on both sides of the Tasman. Furthermore, O’Reilly said the deal would further build Pyrios’ skills in Microsoft services and integration to support the growing number of businesses using Microsoft Skype for Business as their principal communications platform.
ASX-listed Tomizone embarked on what it described as the "first step" of its strategy to grow the business through acquisitions, through buying Bluesky Online Services in September. The Wi-Fi services provider purchased the New Zealand-based managed services provider for a combination of cash and shares, made up of $142,500 in cash and 6.67 million Tomizone shares. Tomizone share were trading at two cents each on the day, valuing the transaction at something under $300,000.
Utility and airport management software company Gentrack Group acquired UK-based utility customer information and billing system provider, Junifer Systems, in March. Auckland-based NZX/ASX dual-listed Gentrack paid $74.6 million (£42.0 million at a NZD/GBP foreign exchange rate of 0.5632) for Junifer under an unconditional agreement. Junifer supplies energy retailers in the UK, claiming 25 existing customers out of approximately 50 energy retailers in that market. Its technology is provided as-a-service to offer new entrant utilities a cost effective solution.