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M2 Group Acquires CallPlus Group for NZ$250m

M2 Group Acquires CallPlus Group for NZ$250m
Apr 13, 2015 By Wise-owl

Australian telcom M2 Group (ASX:MTU) has announced a deal to acquire New Zealand’s third largest internet service and fixed voice provider CallPlus Group. The Australian company will pay NZ$250m (A$246m) for both Callplus Group and for 2Talk Limited. In an announcement to the ASX, M2 Group said the acquisition would contribute an estimated NZ$250m in revenue and NZ$45m in earnings before interest, taxation, depreciation and amortisation (EBITDA) for FY2016. The company also expects its pro forma leverage to be approximately 2.0x net debt / FY2016 EBITDA under the new deal. 100 per cent of both CallPlus Group and 2Talk Limited will be purchased in the acquisition.
Goldman Sachs oversaw the transaction on behalf of M2 Group. The New Zealand company will remain intact after the purchase is complete. The company’s CEO, Mark Callander, and other executives will stay in place to manage the company. M2 Group CEO Geoff Horth said the company decided to go through with the acquisition because CallPlus Group is in a strong financial position. "We are thrilled to bring CallPlus into the M2 fold, at a time when it is delivering strong growth and profitability," Mr. Horth said. He went on further to say that the deal would provide value to the company’s shareholders. “This is a substantial, highly earnings accretive transaction, which again illustrates M2's commitment to continue to increase returns to our shareholders, via both organic and acquisitive expansion."
Shares of MTU are up 70c, or 6.71 per cent, at $11.13 per share around 12:35pm on Monday. The company has had a strong year on the ASX. MTU has advanced 95.41 per cent in the last 12 months and is up 36.29 per cent so far this year.

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