Timing tipped for Vocus NZ float

The perpetually tipped float of Vocus Group’s New Zealand unit now has a date attached.

Vocus NZ will have an IPO in November, subject to market conditions, according to a report in The Australian.

In 2020, the Australasian telco’s New Zealand arm (which includes Vocus, Orcon, Flip, provisioning for Sky Broadband, a nationwide fibre network and a power retailer) saw its operating earnings rise 4 per cent to $65.4 million on revenue that increased 6 per cent to $398m.

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Vocus NZ is tipped to float at a market cap of between $500m and $700m, or between 8 and 11x ebitda.

The second telco with an IPO on the table, 2degrees, is tipped to flat an 11x ebitda valuation.

The only directly listed retail telco today, the much larger Spark – which reported operating earnings of $1.1 billion yesterday – trades at a multiple of just under 9x ebitda (network operator Chorus trades at a 4x multiple).

Vocus Group delisted from the ASX in June after its A$3.5b sale to Voyager Australia – a joint venture set up by Macquarie Group subsidiary Mira, with support from Australia’s largest superannuation fund Aware Super).

A spokesman for Mira earlier confirmed to the Herald that Goldman Sachs, UBS and Forsyth Barr have been retained to manage the possible float or trade sale of Vocus’ NZ operation, but said no decision had been which path to take, or when. Mira has been asked for comment this morning.

Meanwhile, 2degrees confirmed last month that it has wrapped up a 32-Zoom call non-deal virtual roadshow. Earlier this week, the Kiwi telco’s chief executive Mark Aue told the Herald that the position of its US owner Trilogy International Partners remains that “An IPO is possible by the end of the year.”

As with Vocus NZ, it’s still an open question whether a float would be on the NZX, the ASX or a dual listing.

Across the Tasman, The ASX’s All Technology index, which debuted in February last year, has maintained its broad upward run through the Delta outbreak, outpacing the broader ASX200.

Vocus NZ by the numbers

Vocus Group’s NZ operation is headed by Mark Callander, who also runs the telco’s wholesale business on both sides of the Tasman.

Callander was formerly an executive director, as well, but resigned (along with all other directors) as the sale closed and Mira and Aware Super installed their own executives on a new board.

The Aucklander received A$8.4m as compensation for the cancellation of his long-term bonus share options, subject to his continued service under the new owners.

Vocus NZ’s recent forays have included buying the 20,000-customer Stuff Fibre, partnering with Sky TV and Chorus on the new Sky Broadband service, and being the first telco (through its Orcon brand) to offer Chorus’ new Hyperfibre 8 product.

The 2020 Stuff Fibre acquisition bumped Vocus’ NZ subscriber base up 10 per cent to around 226,000 (putting Vocus well ahead of 2degrees and Trustpower in fixed-line broadband, if still some distance being Vodafone NZ on around 420,000 and Spark on around 700,000).

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