Baycorp Advantage has sold its New Zealand and Australian debt collection business for A$97 million ($117.9 million).
The company said today the debt collection business Baycorp Advantage Collection Services (BCS) was being bought by a consortium called Trans Tasman Collections.
The consortium included Allco Equity Partners, which has a 17.3 per cent shareholding in Baycorp Advantage, and Deutsche Bank Capital Partners.
Baycorp Advantage was formed from the 2001 merger of New Zealand company Baycorp with Australian firm Data Advantage.
Today's sale news was greeted positively by the New Zealand sharemarket, with the dual-listed stock rising 18c, or 4.7 per cent, to $4.05 after the announcement.
Baycorp Advantage CFO Jon James said the company employed slightly more than 300 staff in New Zealand now, about 250 of those, mostly call centre workers, would be going with BCS to its new owners.
BCS contributed about 30 per cent of current group revenues, roughly half of it coming from New Zealand, he said.
"We've actually built a fairly large presence in New Zealand that deals not only with New Zealand debt collection but also does Australian debt collection.
"So the larger portion of the way we've built the (debt collection) business actually comprises individuals on the ground in New Zealand," Mr James said.
Probably about 60 per cent of workers in the debt collection business were based in New Zealand and were the heart of the operation.
Much of the intellectual property developed to run the debt collection systems had been developed in New Zealand over many years.
Those systems were hosted in this country and operated from here for both this country and Australia.
From an Australian perspective, with the weakening of the New Zealand currency against its Australian counterpart having operations in this country made sense.
The remaining part of the company -- the credit bureau providing information services and solutions -- would continue to have a credit bureau in New Zealand.
The former Baycorp in New Zealand had two divisions as well, debt collection and information services, Mr James said.
"That information services business which was the primary driver of value in the old Baycorp in New Zealand, we still retain that business and will continue to build on it."
Baycorp Advantage said the sale followed a competitive sale process, which included an evaluation of both trade sale and initial public offer options.
Approval was needed from the Australian Foreign Investment Review Board and the New Zealand Overseas Investments Commission.
The ASX would be asked to waive its requirement for shareholder approval of the deal on the basis that the sale was the result of a competitive public sale process.
Baycorp Advantage managing director Andrew Want said that subject to usual adjustments at completion, the sale price would represent a premium of about A$15 million to the book value of BCS.
The sale allowed Baycorp Advantage to implement further capital management initiatives, following a capital return to shareholders last year and the current on-market share buyback.
An announcement on capital management was to be made before completion of the transaction, following detailed analysis.
Under the deal, Baycorp Advantage Group would adopt a new name and brand within the next year. BCS acquired ownership of the "Baycorp" name for use in the debt collection industry.