Telecom New Zealand has announced it is selling its Australian subsidiary, AAPT, to internet company TPG for $450 million.
In October 2010, Telecom NZ sold off the consumer arm of AAPT to iiNet for $60 million, after selling off its holdings in iiNet and Macquarie Telecom for $140 million in July of that same year.
Under that deal, iiNet took AAPT’s 113,000 DSL connections as well as 251,000 other consumer accounts.
iiNet also took over AAPT’s webmail service, consumer billing system, and control of its outsourced call centre in Manilla.
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However, Telecom NZ retained ownership of AAPT’s national fibre optic network, as well as its wholesale and government/enterprise communications products and infrastructure.
Many of those assets, in turn, were acquired by Telecom through its takeover of PowerTel.
The deal, which is scheduled to close on February 28 subject to regulatory approval, will see TPG take over AAPT’s remaining assets.
Proceeds of the deal will help Telecom NZ pay down debt, as it focuses on delivering communication, entertainment and IT services in New Zealand.
“The sale of AAPT is consistent with this strategy and with our desire to focus principally on our New Zealand operations and on the needs of New Zealand customers,” Telecom NZ chief executive Simon Moutter says in a statement.
“AAPT is performing well. David Yuile and his management team have done an impressive job during the last three years to simplify, stabilise and reshape the company. By focusing on AAPT’s wholesale and corporate businesses, the management team has grown the customer base and, most importantly, driven profitable growth.”
For its part, AAPT chief executive David Yuile says in a statement he sees his company as being well positioned for future growth in the Australian market.
“We are very energised by the progress we have made and the massive turnaround AAPT has experienced after several years of hard work and tough decisions. AAPT is now ready for another chapter in its evolution and we look forward to the future,” Yuile says.
While TPG is yet to issue a statement at the time of publication, its corporate division reported an EBIDTA (earnings before interest, taxes, depreciation, and amortisation) of $110.3 million for financial year 2013,
By contrast, AAPT reports a current recurring annualised EBITDA run-rate of approximately $70 million.
TPG also reported an overall EBIDTA of $293.1 million, free cashflow of $174.5 million and revenue of $724.5 million.