StarHub will acquire a majority interest in a new entity that will hold MyRepublic’s broadband business in Singapore, according to a filing to the Singapore Exchange on Sept 22.
StarHub’s total investment will be up to $162.8 million. An initial consideration of $70.8 million will be paid by StarHub for 50.1% of the shares in the new entity, MyRepublic Broadband, while a deferred consideration of up to $92 million will be paid if future financial performance matrices are met.
In addition to equity, StarHub has agreed to refinance $74.2 million of debt for MyRepublic for a period of three years, on completion of the transaction. MyRepublic will retain the remaining 49.9% stake and its senior management team, helmed by co-founder and CEO Malcolm Rodrigues.
According to StarHub, MyRepublic Broadband currently holds a 6% share of Singapore’s broadband market.
The proposed transaction is expected to consolidate and strengthen StarHub’s position in the Singapore broadband market, expanding its market presence to 40% and steering long-term business growth.
See also: StarHub posts 12.3% drop in 1H earnings to $67.9 mil on lower JSS
In the future, MyRepublic’s broadband customer base will stand to gain access to enhanced offerings from StarHub’s Consumer and Enterprise Business Groups, including the growing suite of products and services offering connectivity, Over-the-top content, cloud gaming and other experiences. The partnership would also create mutually beneficial opportunities through scale and synergies – in terms of joint go-to-market opportunities, future wholesale offerings, and cost savings.
“We are delighted to partner MyRepublic to step up innovation and bring more value to more customers in Singapore. COVID-19 has shown just how important quality broadband services are to our society, and we intend to scale up and deliver better and faster services to our customers, while realising high-quality earnings accretion. We stand to mutually benefit from StarHub’s digital-first technology platforms, our challenger mindset in innovation and customer-centricity, and MyRepublic’s lean operating model and experiences in regional markets,” says Nikhil Eapen, CEO of StarHub.
Rodrigues says the partnership propels MyRepublic’s journey towards an initial public offering. “With StarHub onboard as a key investor, we are charting a new course for the long-term direction of the industry,” he adds.
Upon completion of the acquisition, MyRepublic Broadband will be a StarHub subsidiary. The transaction is a mix of equity and debt and will be funded using StarHub’s internal cash resources. It is expected to close by December, subject to the fulfilment of mutually agreed conditions and regulatory approvals.
Shares in StarHub closed up 2 cents or 0.64% higher at $1.24 on Sept 21.
Photo: StarHub
