Superloop has entered into a binding agreement with Columbia Capital and DigitalBridge Investment Management, the investment management arm of DigitalBridge Group, to sell Superloop (Hong Kong) Limited and certain select assets from Superloop (Singapore) Pte Ltd for A$140 million.
The sale price represents a 30% premium to the A$108million carrying value of the assets today.
In connection with the sale, Superloop will maintain operations in Singapore and Hong Kong and purchase a 15 year Indefeasible Right of Use (IRU) on the existing or future expanded Singapore and Hong Kong networks. This will allow the company to continue to participate in these markets, and provide end-to-end connectivity services to Superloop’s INDIGO submarine cable (INDIGO) customers in the region.
Under these terms, Columbia Capital and DigitalBridge will also become strategic partners to Superloop and will work with Superloop to drive incremental traffic on INDIGO. Superloop will continue to operate and support the Singapore network under various services agreements for Columbia Capital and DigitalBridge. Superloop will receive a management fee of S$1.5 million per annum, plus any incremental capital expenditure required, to deliver these services.
On completion, a number of Superloop’s Singapore customers and contracts (excluding INDIGO customers and contracts) will be novated to the new entity established by Columbia Capital and DigitalBridge.
Paul Tyler, CEO and Managing Director of Superloop said, "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.
"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.
"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.
“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.
"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."
Subject to customary closing conditions being met, deal completion is expected in early 2022.