Stuff Fibre has been sold to Vocus - the ASX-listed owner of Orcon and Slingshot - in a deal set to close on May 20.
Neither party would comment on the price, but the transaction did reveal that Stuff's foray into broadband was a modest one.
Initially, at least, Stuff Fibre will continue to operate as a standalone brand.
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Vocus says it has taken on 20,000 new customers with the deal, taking its total to 225,000 (and keeping it comfortably ahead of 2degrees and Truspower on around half that number; and consolidating Vocus' place as the number three in fixed broadband behind Vodafone with just over 400,000 customers and Spark on just under 700,000).
Stuff also confirmed today that it had completed the sale of its shareholding in another diversification venture, power retailer Energy Club, to Future Energy Management Company, a clean energy startup founded in 2017.
EnergyClub had about 11,500 customers at March 31, according to Electricity Authority data.
The refocus on its core business comes as Stuff has been put up for sale by its Australian owner, Nine. NZ Herald publisher NZME is among the prospective buyers. Stuff has been on the block for more than a year, but the action heated up earlier this week as an NZME filing to the NZX disclosed a $1 offer.
Stuff Fibre was established four years ago as Stuff sought new revenue beyond media. The service was originally provisioned by Vocus (meaning Vocus provided the service behind the scenes, and clipped the ticket). But Vocus was later replaced by Vibe. Vocus and Vibe getting a cut made the already low-margin business of providing fixed-line broadband even lower, but as Stuff Fibre was created, the publisher said it could save costs by advertising the service across its platforms. It later also used social media, among other platforms.
Vocus New Zealand chief executive Mark Callander said, "This is a really positive move for us, we have always been clear that we want to be the telco provider for one in four Kiwi homes – whether that's through a residential service, or through wholesaling services to another retailer – and this purchase helps bring us closer to that goal.
"Stuff Fibre has some great products, such as in-home Wi-Fi troubleshooting, which we will introduce to our existing customers and we'll work to bring Vocus products such as power and mobile services to the Stuff base."
Callander said buying a business during uncertain times showed that Vocus is confident that there are real opportunities to grow the business in the coming months and years, as we have done with Woosh and Orcon purchases previously."
Stuff chief executive Sinead Boucher said, "When we launched Stuff Fibre in 2016, our vision was to use the powerful scale, reach and trust of Stuff, Neighbourly and our newspapers to launch new businesses and supercharge their growth. This has proven a successful approach and we will continue to look for new opportunities to do the same in future."
The Stuff Fibre staff to will transfer to Vocus, Callander said.