Singapore telco company StarHub announced today (September 22) that its wholly-owned subsidiary, StarHub Online, will acquire a majority interest in new entity MyRepublic Broadband.
MyRepublic Broadband holds MyRepublic’s broadband business in Singapore, providing services for residential and enterprise customers.
StarHub’s total investment will be up to S$162.8 million, with an initial consideration of S$70.8 million for 50.1 per cent shares of MyRepublic broadband and a deferred consideration of up to S$92 million, should future financial performance matrices are met. These will be funded using StarHub’s internal cash resources.
MyRepublic will retain the remaining 49.9 per cent and its senior management team, helmed by co-founder and CEO Malcolm Rodrigues.
In addition to equity, StarHub has agreed to refinance S$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 expected to close by December 2021, subject to the fulfilment of mutually agreed conditions and regulatory approvals.
Notable milestone ahead of potential IPO
MyRepublic Broadband is a profitable and growing business, which currently holds six per cent share of Singapore’s broadband market.
The proposed transaction will consolidate and strengthen StarHub’s position in the Singapore broadband market, expanding its market presence to 40 per cent 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 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,” said Nikhil Eapen, Chief Executive Officer of StarHub.
Malcolm Rodrigues, CEO of MyRepublic, 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. Everything consumers and enterprises love about MyRepublic is about to get even bigger and better through the commercial and operational synergies from this partnership.”
“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.”
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Featured Image Credit: Nikkei Asia / Hardwarezone