Mercury NZ said it had sold its smart-metering business, Metrix, to Pacific Equity Partners-controlled Australian metering company intelliHUB Group for $270 million.
The Auckland-based power generator and retailer said the sale would help to simplify the company.
As part of the deal, Mercury and IntelliHUB will enter into a long-term meter services agreement. Sale proceeds will initially be used to pay down debt, Mercury said.
Further application of the proceeds will be considered with the company's full-year results.
Chief executive Fraser Whineray said Metrix has been a strong performer, operating and branded separately from Mercury's core generation and retail activities.
"It is one of the country's leading smart metering solution providers, managing over 460,000 meters with household and commercial connection points," he said in a statement.
"These features made it attractive to a focused owner looking to advance the role of smart metering technologies in New Zealand and Australia even further," Whineray said.
Mercury's retail business has metering service agreements with all significant metering service providers.
Under the sale agreement Mercury's retail business will continue to be a key partner of Metrix, he said.
IntelliHUB is a fast-growing trans-Tasman entity that is exclusively focused on metering services.
Mercury shares last traded at $3.44, having gained 2 per cent over the last 12 months.