Hong Kong fixed line operator HKBN has entered into a HK$650 million ($83.6 million) deal to acquire New World Telephone Holdings Limited (NWTHL) as part of efforts to increase its share of the enterprise segment.
The conditional deal would see HKBN acquire the telecom and online marketing business of NWTHL, including its core fixed line and broadband business.
HKBN said the merger would double the size of its enterprise solutions business. NWTHL's telecom business generated revenue of HK$613 million in revenues in its last full financial year.
The combined company would have more than HK$3 billion in total revenue, including over HK$1 billion in enterprise services revenue. HKBN would also be able to expand its mid-size enterprise customer base, allowing the company to accelerate its growth in the SME segment.
According to HKBN co-owner and CFO Ni Quiaque Lai, the merger would be in line with the company's near-term priorities.
“HKBN’s success has been a direct result of our talents and our relentless focus on disruptive innovation. During our IPO in March 2015, we said that we will continue to further penetrate the enterprise market, and now we are delivering on this promise with the announcement of this acquisition,” he said.
The acquisition is still subject to shareholder approval, but investors holding around 24% of the company's share capital have already agreed to vote in favor.