Vocus in talks to buy NZ backbone provider FX Networks

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Vocus in talks to buy NZ backbone provider FX Networks

Could spend more than $94 million.

Stock exchange-listed telco and internet provider Vocus is said to be eyeing New Zealand national backbone operator FX Networks, in a deal worth over NZ$100 million (A$94 million), according to sources close to the discussions.

According to the sources, Vocus and FX Networks have been in talks over a sale of the latter to the former for the past few weeks, with a deal imminent.

James Spenceley, chief executive and founder of Vocus, declined to comment on the deal when approached by iTnews.

Trading in Vocus shares were halted on the ASX earlier this morning, after company secretary Mark Simpson requested the halt pending an announcement of a "possible acquisition".

However, the largest shareholder of privately held FX Networks, UK-based Colin Hill, confirmed to the National Business Review [paywall] that his company was for sale.

Hill did not name the potential buyer, but told the NBR that the asking price for FX Networks was over NZ$100 million, based on annual revenues of NZ$50 million (A$47 million).

Hill, who owns a third of FX Network cited his advanced age, 74, as the main reason for the sale.

Vocus has been actively investing in New Zealand in recent years, having bought internet provider Maxnet and its data centre facilities in Auckland two years ago, for just under $10 million.

Last year, the Australian telco took the wraps off a $2 million expansion of its Auckland data centre, and shifted its network operations centre for the Asia-Pacific to New Zealand's largest city.

FX Networks has around 4000 kilometres of fibre-optic circuits throughout New Zealand. The provider's national network is capable of eight terabits per second bandwith, and FX counts the Research, Education and Academic Network of New Zealand (REANNZ) as one of its customers.

Should the deal goe through, it would give Vocus an extensive network in the region, spanning from Dunedin at the southern edge of New Zealand to Perth in West Australia.

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