StarHub will acquire a 50.1 percent stake in MyRepublic’s broadband business for up to S$162.8 million, in a move by StarHub to participate in its target’s regional growth and by MyRepublic to boost its IPO outlook, the Singapore telecoms said in a filing to SGX Wednesday.
Under the deal, MyRepublic has incorporated a new entity, called MyRepublic Broadband, which will hold the Singapore broadband business for residential and enterprise customers, the filing said. MyRepublic Broadband currently has a 6 percent share of Singapore’s broadband market.
StarHub will pay an initial consideration of S$70.8 million for the 50.1 percent stake in MyRepublic Broadband, and will pay a deferred consideration of S$92 million if financial performance targets are met, the filing said. StarHub said it also agreed to refinance S$74.2 million of debt for MyRepublic for three years.
The deal will be funded via a mix of equity and debt using StarHub’s internal cash resources, the filing said.
“The proposed transaction will consolidate and strengthen StarHub’s position in the Singapore broadband market, expanding its market presence to 40 percent and steering long-term business growth. 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 two companies said.
“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 saving,” the companies added.
MyRepublic will retain the remaining 49.9 percent of MyRepublic Broadband, and its leadership team will be unchanged, the filing said.
Malcolm Rodrigues, CEO of MyRepublic, said the deal would boost his company via commercial and operational synergies.
“More importantly, this milestone propels us forward in MyRepublic’s journey towards IPO. With StarHub onboard as a key investor, we are charting a new course for the long-term direction of the industry,” Rodrigues said in the statement.
For the financial year ended 30 June 2021, MyRepublic Broadband has a negative net asset value of S$1.2 million, an dposted a net profit of S$5.2 million, the filing said.