Infratil (ASX:IFT) has executed a conditional agreement with a telecommunications company in Hong Kong, HKT Trust and HKT Limited to expedite the growth of its Console Connect company.
The company will initially acquire an 80% stake in Console Connect from HKT for USD$160 million.
Infratil will enter into a strategic partnership with HKT, with both jointly investing up to USD$295 million over a 2-year period, following completion of the acquisition to accelerate Console Connect’s growth.
“Our partnership around Console Connect … will deliver material benefits to the business as well as to HKT shareholders”
Following this initial period of growth investment, the company will own about 60% to 80% of Console Connect, with HKT holding the remainder. Ultimate ownership stakes will reflect the relative contributions of each party over this initial 2-year period.
Infratil will have governance rights consistent with its interest and working alongside HKT as the majority investor.
Commenting on the agreement, Infratil Chief Executive Officer (CEO) Jason Boyes said: “Our partners in HKT have built a highly attractive software-defined interconnection platform over the past several years and we look forward to investing alongside them to accelerate the growth of Console Connect.”
Meanwhile HKT Group Managing Director Susanna Hui says: “We are pleased to have found a like-minded partner in Infratil who is excited about the potential opportunities to continue growing Console Connect.
Our partnership around Console Connect, investing in the platform as a standalone operation, will deliver material benefits to the business as well as to HKT shareholders through unlocking value and further developing economies of scale.”
Completing the acquisition is conditional on telecommunication, foreign investment regulatory approvals and merger approvals in Australia, France, Germany, Greece, Hong Kong, Italy, Japan, Mozambique, the Netherlands, Singapore, South Africa, and the U.S.
The company notes assuming those approvals are granted, the acquisition is anticipated to be completed by Q3 2024.
Bank Street has acted as exclusive financial advisors and Herbert Smith Freehills acted as legal counsel to Infratil. Moelis acted as financial advisor and Gibson Dunn acted as legal counsel to HKT.
Console Connect is a global software-defined interconnection platform offering next-generation automated connectivity solutions. The platform makes connecting to data centres, partners, clouds, and other applications simple and secure, with fully automated switching and routing.
Infratil is a New Zealand-based infrastructure investment company, which owns renewable energy, digital infrastructure, airports, and healthcare assets with operations in New Zealand, Australia, Asia, the U.S, and Europe.