Telecom has signed a conditional agreement to buy New Zealand datacentre provider Revera for $96.5 million. The acquisition is funded by cash and borrowing, and is expected to be settled next month.
The two companies have announced this morning the Revera brand will be retained and continue to operate as a standalone business unit, specialising in providing cloud infrastructure to Telecom's enterprise division Gen-i. It hasn't been revealed how this deal will affect Revera's 140 staff or Telecom's shrinking (but still massive) payroll of around 7000 employees. In a written statement Telecom and Revera say there will be cuts made where there are non-strategic duplications of resources.
Revera, along with Datacom and IBM, are part of the government's infrastructure-as-a-service (cloud) procurement panel – which means Telecom now has access to lucrative government contracts for providing cloud services to government agencies.
Telecom chief executive Simon Moutter has long been proclaiming his business strategy to keep the telco in the black following its separation with Chorus in 2011. It's clear now from this announcement, and the the Digital Ventures announcement, that Moutter's plan is to move Telecom away from becoming a dumb pipe for data and into new and sustainable revenue streams.
"This acquisition adds a respected brand that deepens our IT services portfolio for business customers, particularly with regards to cloud services. Both Gen-i and Revera will be better positioned to respond to evolving customer needs in the areas of big data and cloud computing,” says Moutter.
Revera CEO Robin Cockayne says, “Ten years ago Revera founders Roger Cockayne and Wayne Norrie put everything on the line to turn a fledgling hosting business into one of New Zealand’s leading computing infrastructure providers. I can think of no better endorsement of Roger and Wayne’s vision and the hard work and commitment of Revera staff than a company of Telecom’s importance staking a chunk of its future on Revera."
Telecom and Revera are holding a press conference later today. More as this story develops.