SINGAPORE – Local phone company StarHub will buy a controlling 50.1% stake in the broadband business of rival internet service provider MyRepublic for residential and business customers in Singapore, which itself was initially started by a former manager of a StarHub subsidiary.
Announcing this on Wednesday, September 22, the two companies said the proposed transaction would consolidate and strengthen StarHub’s position in the Singapore broadband market, expanding its market presence to 40% and “directing long-term business growth.” .
MyRepublic currently holds a 6 percent share of the broadband market here.
The transaction is expected to close by December, subject to meeting mutually agreed terms and regulatory approvals.
Internet service providers added that MyRepublic’s broadband customer base will benefit StarHub’s consumer and enterprise groups.
This includes a growing suite of products and services offering connectivity, over-the-top content, cloud gaming, and other experiences.
Over-the-top services are those offered directly over the Internet such as Netflix, Apple iTunes, YouTube, and Facebook. They generally exclude services offered by cable or broadcast providers such as bundled cable TV channels.
The acquisition involves a wholly owned subsidiary of StarHub, StarHub Online, which purchases a controlling stake in a new business entity, MyRepublic Broadband, which owns the broadband business of MyRepublic here.
MyRepublic also has broadband operations in Australia and New Zealand, offers mobile services in Singapore, and has license agreements in Brunei and Indonesia.
StarHub’s total investment in MyRepublic will be $ 162.8 million. There will be an initial consideration of $ 70.8 million for 50.1 percent of the shares of MyRepublic Broadband and a deferred consideration of up to $ 92 million if future financial performance matrices are met.
The transaction is a mix of equity and debt and will be funded using StarHub’s internal cash resources. StarHub also agreed to refinance $ 74.2 million of MyRepublic debt for three years.
MyRepublic will retain the remaining 49.9% stake in MyRepublic Broadband.
Wednesday’s statement said that the management team of MyRepublic, led by its co-founder and CEO Malcolm Rodrigues, will continue to lead MyRepublic Broadband “with the same principles and values ââthat have led the company to its current position of Singaporean domestic brand of its creation ten years ago “.
MyRepublic was launched about 10 years ago and launched its broadband services in 2012.
Prior to MyRepublic, Mr. Rodrigues was responsible for sales and marketing at Nucleus Connect, a subsidiary of StarHub that manages and operates the national next-generation broadband network that has fueled the growth of fiber broadband in Singapore.
In August, MyRepublic announced that it had appointed former StarHub veteran Jeannie Ong as the group’s head of investor relations, a new role at the company.
Ms. Ong was the former Director of Strategic Partnerships and Director of Marketing for StarHub. She was part of the team that helped StarHub’s initial public offering (IPO) in 2004 and left the phone company after 17 years of service.
MyRepublic had said Ms Ong would lead efforts to build and maintain investor and stakeholder relationships, with the aim of leading the company to an IPO.
The IPO has been delayed a few times. In 2019, the company said it plans to go public in Hong Kong by the end of 2020. Previously, it had postponed its debut from late 2018 to mid-2020.
In Wednesday’s announcement, StarHub Managing Director Nikhil Eapen said, âWe will mutually benefit from StarHub’s digitally-driven technology platforms, from our challenging spirit of innovation and direction. client, as well as the lean operating model and experiences of MyRepublic in regional markets. “
âCovid-19 has shown how important quality broadband services are to our company, and we intend to grow and provide better and faster services to our customers, while achieving revenue accumulation of high quality, âhe added.
Mr. Rodrigues said StarHub’s investment and partnership with MyRepublic “validates the vision for the digital transformation we intend to bring to the industry, in Singapore and beyond.”
âEverything consumers and businesses love about MyRepublic is about to get even bigger and better thanks to the business and operational synergies of this partnership,â he said. “Most importantly, this step propels us forward on MyRepublic’s path to an IPO.”