GenusPlus Group to acquire UCG for ~NZ$38.25m upfront
GenusPlus Group (ASX: GNP) has entered into a binding Share Purchase Agreement (SPA), through its wholly owned subsidiary Genus Services Pty Ltd, to acquire 100% of Universal Communications Group Holdings Limited (UCG). The UCG acquisition adds a New Zealand based telecommunications construction and maintenance provider to the group.
The headline consideration comprises:
- ~NZ$38.25m in upfront cash consideration
- ~NZ$1.75m in deferred cash consideration, payable over 2 years
- Contingent earn-out cash payments of up to NZ$25m, subject to FY27 and FY28 adjusted EBIT performance
The announcement puts the upfront acquisition multiple at 5.1x EV/EBIT, based on NZ$40m of upfront and deferred consideration and unaudited FY26A adjusted EBIT of NZ$7.8m. The multiple is 5.0x EV/EBIT assuming the maximum earn-out target is achieved.
GenusPlus has paid low multiples before, with the Railtrain acquisition carrying a maximum 2.75x EV/EBITDA, although that is an EBITDA-based measure and not directly comparable with the EBIT multiple on UCG.
GenusPlus describes the acquisition as “expected to be immediately earnings accretive.” For investors, that points to a relatively low multiple paid for a profitable business with a long-term customer contract.
Who is UCG?
UCG is a privately-owned, New Zealand based telecommunications construction and maintenance service provider to Tier 1 network owners across New Zealand and the Pacific Islands. Its operating subsidiary was founded in 2013, and the group employs approximately 150 staff across 6 offices in New Zealand.
Based on unaudited management accounts, UCG generated FY26 revenue of approximately NZ$96m and adjusted EBIT of approximately NZ$7.8m. These figures have not been audited.
David Riches, Managing Director, GenusPlus
“UCG is a highly complementary acquisition that will add scale and capability to our services business and establish a platform for further growth in New Zealand…”
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Why Chorus and SiteTRAX make UCG strategic
UCG has a 10+ year relationship with Chorus, which the announcement describes as New Zealand’s largest telecommunications infrastructure company. Chorus remains UCG’s key customer, with a long-term contract to deliver Chorus’ maintenance, build and provisioning works in the upper North Island of New Zealand, including Greater Auckland.
The announcement does not disclose the contract’s value or expiry.
What the services involve
Telecommunications construction and maintenance services cover building network infrastructure, such as fibre networks, and keeping it operating once built. Network owners like Chorus rely on contractors for this work.
A workorder management system is software used to assign, track and record individual jobs across a network. UCG uses a proprietary system called SiteTRAX, which GenusPlus says adds large scale communications network maintenance capability.
Recurring maintenance work matters to investors because it can offer more predictable revenue than one-off builds. The announcement does not provide SiteTRAX performance metrics.
Investment thesis
The announcement points to three main elements:
- Adds scale and large scale communications network maintenance capability to GenusPlus’ telecommunications offering
- Provides a platform of scale to drive further growth in New Zealand across telecommunications and other critical infrastructure sectors
- UCG’s existing KMPs (key management personnel) will continue to manage the business, with all staff offered continued employment
Ralf Luna, UCG Founder
“Joining Genus represents an exciting next chapter for UCG… Becoming part of Genus will give us access to broader capabilities and resources to better support our customers and pursue new opportunities…”
Deal terms, earn-out structure and funding
The upfront cash payment is subject to certain customary completion and post-completion adjustments, including for cash, debt and working capital.
The contingent earn-out of up to NZ$25m across FY27 and FY28 is structured as follows:
| Period | Earn-out amount | Nil payable at or below | Full payment at or above |
|---|---|---|---|
| FY27 | NZ$12.5m | NZ$7.6m | NZ$9.9m |
| FY28 | NZ$12.5m | NZ$9.9m | NZ$13m |
Thresholds refer to adjusted EBIT for the relevant year. Payments are pro rata between the thresholds.
The earn-out ties payment to performance. The FY27 full-payment threshold of NZ$9.9m sits above UCG’s unaudited FY26 adjusted EBIT of approximately NZ$7.8m.
The MPK earn-out structure followed a similar logic at far larger scale, paying up to A$50m only if FY27 EBIT reaches A$70m, which protects GenusPlus against near-term earnings variability.
The acquisition will be funded from GenusPlus’ existing cash balance and its existing syndicated debt facility.
Conditions precedent and what’s next
Completion is subject to certain conditions precedent, including but not limited to the following being satisfied or waived:
- Receipt of change of control consents for UCG’s material contracts and property leases
- Receipt of a direction order from the New Zealand Overseas Investment Office
Completion is indicatively anticipated for the end of October 2026. If the conditions precedent are not satisfied or waived within 40 business days from execution of the SPA, the SPA can be terminated, unless extended.
GenusPlus was advised by:
- Sternship Advisers (corporate adviser)
- Quigg Partners (New Zealand legal advisers)
- Gilbert + Tobin (Australian legal advisers)
- RSM Australia (financial due diligence adviser)
- RSM New Zealand (tax due diligence adviser)
GenusPlus Group is an end-to-end specialist service provider for essential power, rail and communications infrastructure, serving customers in the resources, energy, utilities, rail and communications sectors across Australia and New Zealand.
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