StarHub is acquiring a 50.1% stake in MyRepublic's broadband business for SG$162.8 million, with an initial consideration of SG$70.8 million and a deferred consideration of up to SG$92 million should future financial performance matrices are met. Known as MyRepublic Broadband, the broadband business is a new entity incorporated by MyRepublic and offers broadband services for residential and enterprise customers.
MyRepublic will retain the remaining 49.9% and its senior management team, helmed by co-founder and CEO Malcolm Rodrigues, who will continue to lead MyRepublic Broadband. In addition to equity, StarHub has agreed to refinance SG$74.2 million of debt for MyRepublic for a period of three years, on completion of the transaction.
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 2021, subject to the fulfilment of mutually agreed conditions and regulatory approvals.
MyRepublic Broadband currently holds 6% of Singapore's broadband market, StarHub said, and has built a strong brand and amassed a loyal base of customers. The proposed transaction will consolidate and strengthen StarHub’s position in the Singapore broadband market, expanding its market presence to 40% and steering long-term business growth.
Moving forward, StarHub said MyRepublic's broadband customer base will stand to gain access to enhanced offerings from StarHub's customer and enterprise business groups, including the growing suite of products and services offering connectivity, OTT, 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.
StarHub CEO Nikhil Eapen said COVID-19 has show just how important quality broadband services are to the society and both parties stand to mutually benefit from StarHub's digital-first tech platforms, their challenger mindset in innovation and customer-centricity, and MyRepublic's lean operating model and experiences in regional markets.
Rodrigues added: "StarHub’s investment and partnership with us validate the vision of digital transformation we set out to bring to the industry, in Singapore and beyond." He said the milestone will propel the company forward in MyRepublic's journey towards IPO.
The acquisition comes a month after MyRepublic brought on board Jeannie Ong, former chief strategic partnership officer at StarHub, to lead investor relations as group chief investor relations officer. She is currently responsible for establishing and maintaining strong relationships with investors and stakeholders, with a view of leading MyRepublic to an IPO in the near future, as well as the corporate communications function.
Photo courtesy: 123RF
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