bizEDGE New Zealand logo
Story image

Payday for CallPlus founders in $250M sale to M2

M2 Group, the ASX-listed voice and data services company, has agreed to acquire New Zealand's Call Plus for $250 million, gaining the nation's third largest broadband and fixed voice services provider and the Slingshot, Orcon, Flip and 2talk brands.

The acquisition would add $250 million in sales and $45 million in earnings before interest, tax, depreciation and amortisation in 2016, the Melbourne-based company said in a statement. It would lift M2's 2016 per-share earnings by 15 percent.

The purchase price amounts to about 5.6 times indicative earnings for Call Plus, M2 said. Call Plus chief executive Mark Callander would continue to lead the business under M2 ownership. Call Plus has been in dispute with local content providers about its global mode service, which allows New Zealand consumers to access overseas streaming content from companies such as Netflix.

"We have had a long association with Call Plus, as a wholesale supplier of our existing New Zealand operations and recognise many similarities between our businesses in terms of target customers, team culture and a shared philosophy of disrupting the status quo in our respective markets," said M2 chief executive Geoff Horth.

Shares of M2 climbed 6.2 percent to A$11.11 on the ASX and have soared 100 percent in the past 12 months. The stock is rated a 'buy' based on the consensus of 14 analysts polled by Reuters.

Call Plus shareholders include Malcom Dick and Annette Presley, who founded the company in 2000.