DigitalBridge, Columbia Capital to acquire Superloop HK for A$140m
Superloop has entered into an agreement with Columbia Capital and DigitalBridge Investment Management, to sell Superloop (Hong Kong) for A$140 million ($103.6 million).
As part of the deal between Superloop, Columbia Capital and DigitalBridge Investment Management, the investment management arm of DigitalBridge Group, the sale will also include select assets from Superloop (Singapore).
"This sale of our Hong Kong business and select Singapore assets, at a material premium to their carrying values, allows Superloop to release significant shareholder funds and redeploy them into more strategically aligned assets, and higher growth opportunities and markets," said Paul Tyler (pictured), CEO and managing director of Superloop.
"This transaction is part of Superloop's strategy to create the network infrastructure required by the challengers in the Australian telco market, in the wholesale, business and consumer segments.
In connection with the sale, Superloop will maintain operations in Singapore and Hong Kong and purchase a 15-year Indefeasible Right of Use on the existing or future expanded Singapore and Hong Kong networks.
This will enable Superloop to continue to operate in these markets and provide end-to-end connectivity services to Superloop’s INDIGO subsea cable customers in the region. While Columbia Capital and DigitalBridge will also become strategic partners to Superloop and will work with the company to drive incremental traffic on the INDIGO subsea cable.
"We continue to consider opportunities to acquire accretive businesses, as we did with Exetel, and to consider the invested capital of the business. Where appropriate, we look to recycle it and re-invest in areas that will drive greater shareholder returns," added Tyler.
In addition, Superloop will continue to operate and support the Singapore network under various services agreements for Columbia Capital and DigitalBridge, with company to receive a management fee of S$1.5 million per annum, plus any incremental capital expenditure required, to deliver these services.
Once the deal is completed, several Superloop’s Singapore customers and contracts (excluding INDIGO customers and contracts) will be novated to the new entity established by Columbia Capital and DigitalBridge.
“Columbia Capital and DigitalBridge are global leaders in digital infrastructure. This new partnership allows us to monetise our international assets, and gain leverage from our respective infrastructures and complementary customer bases," continued Tyler.
"Once we've completed the transaction, Superloop will have a more focused and simplified business, with a significant net-cash position and excellent balance sheet capacity to invest in organic growth and pursue accretive, strategically-aligned M&A opportunities in our chosen customer segments."
The A$140 million ($103.6 million) sale price represents a 30% premium to the A$108million carrying value of the assets today, and subject to customary closing conditions, the transaction is due to complete by early 2022.