NZ Post sells Datacom stake to Cullen Fund
NZ Post has sold its 35 per cent stake in New Zealand information technology services firm Datacom to The Guardians of New Zealand Superannuation, the so-called "Cullen Fund" or NZ Super Fund, for $142 million.
The state-owned enterprise will net a $76.4m gain on the sale. Datacom has more than 4000 staff and posted a net profit of $25m on revenues of $788m for the year to March, with slightly over half its revenues earned outside New Zealand.
The deal values the Datacom business at $405m.
NZ Post said the agreement was subject to some conditions including approval from the Australian Foreign Investment Review Board.
Chief executive Brian Roche said the sale was a necessity given NZ Post's "other capital priorities".
It would use the sale proceeds to clear debt and fund investments in its business, he said.
"Datacom is a tremendously successful New Zealand company which has established a strong presence here, in Australia and most recently in Asia. We have enjoyed a strong relationship with Datacom since 1990 and will continue to do so.
"However, having a significant amount of capital locked up in a minority shareholding does not meet the current needs of the [company]", he said.
NZ Super Fund general manager of investments Matt Whineray said Datacom was a success story with further growth potential.
“Datacom's conservative balance sheet and long-term investment focus are well suited to the fund's approach as a long-term, growth-oriented investor,” he said.
“We look forward to working with Datacom's major shareholder, the Holdsworth family, to continue Datacom's success.”
The $20 billion NZ Super Fund was established in 2003 to help pre-fund New Zealanders' superannuation payments. Other recent New Zealand investments include a 50 per cent stake in Z Energy.
Datacom's majority owner, John Holdsworth, who is believed to be in his 70s, announced last month that he would step down as chairman in March after 24 years at the helm.
He will be succeeded by Craig Boyce, a former chief executive of Smith City and the current chairman of Smiths City and electricity lines company Orion. John Holdsworth's son, Simon, 40, who has been on the board since 2006, will become deputy chairman.