New Zealand Post sells stake in IT firm for $142m
New Zealand Post has agreed a $142m ($120m USD) deal to sell its 35% stake in the IT services company Datacom Group. The sale has been conditionally agreed with the government investment fund Guardians of New Zealand Superannuation, and is intended to raise funds to help pay down debts and invest in priorities for the company.
New Zealand Post said if the deal goes through, it will gain $76.4m ($64.4m USD) on the sale.
Brian Roche, the New Zealand Post CEO, said his company had had a “strong relationship” with Datacom since 1990, and the company had been “tremendously successful” in Australia and Asia.
But he said having a significant chunk of capital locked up in a minority stake was not best use of New Zealand Post’s capital.
“New Zealand Post has been delighted to have been part of the excellent growth and innovation of Datacom,” said Roche.
“However, the strategic imperatives facing New Zealand Post to position our businesses and assets for the future mean we are required to apply this capital elsewhere.”
Founded in Christchurch in 1965, Datacom has offices across New Zealand and in Australia, as well as in Kuala Lumpur, Malaysia. The company is 53% owned by chairman John Holdsworth.
Roche said New Zealand Post would continue to work with Datacom through contracted relationships.
The New Zealand Post CEO added that the buyers of Datacom were “highly suitable”. The sale remains subject to conditions including approval from the Australian Foreign Investment Review Board.
Datacom said New Zealand Post enjoyed “significant returns” as a shareholder for 22 years, with the company achieving a 10-year compound annual growth rate of 14% for revenue and 10% for profit.
Datacom Board Chairman John Holdsworth said: “We welcome New Zealand Superannuation Fund to the Datacom Group and the Datacom Board.
“We’re a New Zealand owned technology services company and long term IT sector innovators and we look forward to a productive partnership with NZSF. We welcome the energy and in-market expertise that this organization will bring to our board and the wider Datacom Group.
“We thank NZ Post for their long-standing commitment and acknowledge our ongoing, productive working relationships.”
