A Timaru internet services company that started out as a small office with two employees a decade ago is now the subject of a $42 million bid from TeamTalk.
BayCity was launched in 2002, and operates the country's largest rural broadband service under its Farmside brand name. It employs about 80 people, and serves more than 15,000 customers.
Chief executive Richie Smith said TeamTalk's bid was great news.
TeamTalk is New Zealand's largest mobile radio company, based in Wellington.
"It's a vote of confidence in the company, and especially, the staff," he said.
"For a NZX-listed company to take such an interest is really gratifying."
TeamTalk would pay $31m upfront in cash and shares and up to a further $11m depending on BayCity's subsequent performance over two years.
The deal is subject to approval by TeamTalk shareholders who will be asked to vote on the acquisition next month. The acquisition is a large one for TeamTalk, which is valued on the NZX at $61.3m.
TeamTalk chief executive David Ware said if the sale went ahead BayCity would continue to operate from Timaru.
BayCity began as the brainchild of Barry Payne. When it began there were only two staff, Mr Payne and his son, Solon. Mr Payne was unavailable for comment last night, but one of the company's first investors, Stephen Palairet, said yesterday's announcement was tribute to Mr Payne's initiative.
"We've come a long way in 10 years. When we began, the telco companies simply weren't meeting the needs of the rural markets. We responded to that need."
Mr Smith said BayCity was going through a period of double-digit growth.
It posted revenues of $25.4m in the year to June when it had earnings before interest, tax, depreciation and amortisation of $5.8m
"Our focus is on the rural market, we're working on a number of exciting developments," Mr Smith said.
"The New Zealand rural families have an increasing need and want for high-speed connectivity. It's our job to ensure they have the technology and that is user-friendly.
"We're developing a whole variety of technology that help with all aspects of the on-farm work. Whether it's measuring temperature, nutrient levels, or easy access to finances, our challenge is to make it accessible," he said.
Mr Smith said the potential extra capital would only lead to further growth.
"Technology is always changing, the challenge for us is to keep up with it. I think this is really good news for Timaru. This shows that you don't need to be based in one of the big centres to be a leading IT company," he said.
Timaru-based BayCity is the subject of a $42 million bid from NZX-listed mobile services company TeamTalk. BayCity employs about 80 staff. Its Farmside brand is the largest rural broadband service in the country, with more than 15,000 customers. It began with two staff – Barry Payne, and his son, Solon, in 2002. Bid subject to final approval from TeamTalk shareholders.
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