Private equity firm KKR launches $1.64bn bid to buy Vocus Communications
Private equity firm Kohlberg Kravis Roberts (KKR & Co) has launched a AUD$2.18 billion ($1.64 billion) bid to buy fibre and Ethernet provider Vocus Communications.
Vocus offers data network services including internet, Ethernet, dark fibre, IP WAN, unified communications and telephony and cloud to mid, large and corporate businesses direct. It also acts as a wholesaler.
The deal would see KKR take on the embattled Aussie telco’s AUD $1.1 billion worth of debt, as well as paying AUD$2.18 billion ($1.64 billion) for shares. The bid came after Vocus downgraded its profit forecasts twice in the last seven months, warning that its annual underlying earnings could shrink as much as 19% in a filing last month.
The proposal is subject to several conditions, including due diligence to KKR’s satisfaction, availability of financing and unanimous recommendation from the Vocus board.
Vocus said its board had formed an independent committee (IBC) to review the offer but added there was no certainty KKR’s proposal would result in a formal takeover bid being made.
Vocus said in a filing note: “The IBC is chaired by David Spence, the independent chairman of Vocus, and also includes Jon Brett, Craig Farrow, Robert Mansfield, and Rhoda Phillippo who comprise the other non-executive directors from the Vocus Board.
“The Vocus Board notes that there is no certainty the Indicative Proposal will result in an offer for Vocus, what the terms of any offer would be, or whether there will be a recommendation by the Vocus Board.”
Vocus has appointed Credit Suisse and Goldman Sachs as its financial advisors and Allens as its legal advisor.
Reports from Australia claim that Vocus has been trying to offload its data centre portfolio to other telco, but had failed to reach any agreements.
It comes as Vocus has been attempting to integrate a number of mergers and acquisitions, including M2 Group and Amcom Telecommunications, plus the takeover of Nextgen Group.