Lance Wiggs, Punakaiki Fund Director. Photo / Sylvie Whinray
Lance Wiggs, Punakaiki Fund Director. Photo / Sylvie Whinray
Lance Wiggs’ Punakaiki Fund wants to exit its controlling stake in Auckland-based Devoli as the internet service provider looks to raise fresh capital following the departure of its founders earlier this year.
Punakaiki has put its 53.9 per cent stake in Devoli on the block along with some other smallshareholder parcels with Australian investment firm Bell Potter hired to handle the sale process.
At the same time, Devoli is investigating raising up to $15 million in new capital with its eye on expanding organically or through acquisition.
The moves follow the exit earlier this year of Devoli founders Davey Goode and Barry Murphy, who sold their remaining stakes in the business to Takutai Limited, the family office of Peter and Mary Wells, founders of NZX and ASX listed Vulcan Steel.
Takutai holds 40 per cent of Devoli and has put James Wells, Vulcan’s chief investment officer on the Devoli board.
Goode and Murphy founded Devoli in 2008 with a mission to make it easy to set up direct relationships with Chorus after its split from Telecom.
Devoli built success around network automation with its key business arm providing a solution for large non-telco companies to sell broadband to their customer bases.
The company counts New Zealand companies Contact Energy and Nova Energy as some of its key customers and has been working on expanding its presence in Australia.
Contact Energy, which owns the Clyde dam (pictured) on the Clutha River, is a Devoli customer. File photo
According to investor briefing notes obtained by the Herald, Devoli now has over 110,000 access services (broadband connections) and reached $90m of annualised revenue in August this year.
The company is forecasting strong growth to 2028 with revenue expected to approximately double over the next three to four years.
Punakaiki was Devoli’s first external investor, originally obtaining a 20 per cent stake in 2014 and progressively lifting that to 44.5 per cent in 2018 and going over 50 per cent by 2020.
The pair were reportedly seeking $10m for just over 25 per cent of the company.
It only recently emerged that Takutai had acquired a shareholding but no transaction price was revealed.
This latest sale process and funding round comes at a time when interest in the sector is high, with a current bidding war across the Tasman between Superloop and Aussie Broadband for ASX-listed Symbio, a communications software-focused company that helped Skype launch in Australia in 2008.
Bell Potter is understood to be seeking offers for the Devoli transaction pre-Xmas.
