New Zealand incumbent says ‘tactical’ investment will bolster its SME offering.

Spark New Zealand on Wednesday agreed to acquire business telco Digital Island.

The incumbent, which has supplied various wholesale services to Auckland-based Digital Island for more than 10 years, said the deal, while relatively small in size, represents a smart, tactical investment.

Indeed, Digital Island boasts Red Bull and Samsung among its client base, as well as smaller New Zealand-based companies, including companies in the automotive, food and drink, mortgage, and health and fitness sectors, among others.

"Digital Island has built a respected brand in the business communications market, and has a great cloud PABX offering for NZ businesses," noted Ed Hyde, CEO of Spark Ventures and Wholesale, in a statement. "As such, this acquisition will further improve our offering to small and medium-sized customers."

For Digital Island, the deal represents an opportunity to further growth.

"This is a great outcome for our valued staff and customers. It will allow us to continue our very successful data, mobile and cloud bundle for business, while further innovating and growing with the backing of Spark," said Blair Stewart, general manager of Digital Island.

Spark said it intends to operate Digital Island as a standalone business reporting to Spark Ventures and Wholesale. Financial terms were not disclosed.