Acquisition of Speed Fibre Group
This announcement is being disclosed in accordance with the Market Abuse Regulation (EU596/2014), which is part of UK law pursuant to the Market Abuse (Amendment) (EU Exit) Regulations (SI 2019/310) and has been determined to contain inside information in line with the definition therein.
24 August 2023
LEI: 213800T8RBBWZQ7FTF84
Cordiant Digital Infrastructure Limited
Acquisition of Speed Fibre Group
Cordiant Digital Infrastructure Limited (the "Company" or "CORD"), an operationally focused specialist digital infrastructure investor, is pleased to announce that it has entered into an agreement to acquire the entire issued share capital of Speed Fibre DAC ("Speed Fibre"), Ireland's leading open access fibre infrastructure provider (the "Transaction"). Speed Fibre is being acquired from the Irish Infrastructure Fund for a total enterprise value of €190.5 million. The equity consideration of €97 million will be funded by €68 million in cash and €29 million through a vendor loan note with an initial interest rate of 6% and a maturity of four years.
On closing, Speed Fibre will be the fourth digital infrastructure platform acquired by the Company since its launch in 2021 and is consistent with its investment programme of buying strategic, cash flow generating platforms under its "Buy, Build & Grow" model. The acquisition further diversifies CORD's portfolio on a sub-sector and geographic basis. The Transaction is subject to customary regulatory approvals in Ireland and the United Kingdom and is expected to close later this year.
Speed Fibre operates 5,400 kilometres of owned and leased fibre and wireless backhaul across Ireland, on which it provides dark fibre, wavelength and ethernet services to a mix of carriers, internet service providers, corporate customers, and the government. The business is also well-positioned to serve Ireland's growing data centre sector, which is expected to be the fastest growing hyperscale data centre market in Western Europe over the next six years. While primarily a backbone provider, Speed Fibre's subsidiary, Magnet Plus, provides connection and service to approximately 10,000 business and retail customers in Ireland.
With a stable business model, sales growth and high revenue and cash flow visibility, Speed Fibre generated revenues of c. €80 million and EBITDA of c. €23 million in 2022. Outstanding gross debt of c. €111 million as at December 2022 and which matures in 2029 is provided by three bank lenders, all of whom have committed to continue to support Speed Fibre under the Company's ownership. Gross debt was balanced by c. €19 million of cash on hand at year end 2022.
Speed Fibre has a strong ESG and sustainability focus, earning a 5-star rating from GRESB, an independent organisation providing validated ESG performance data, and is targeting net zero carbon emissions by 2040.
Shonaid Jemmett-Page, Chairman of Cordiant Digital Infrastructure Limited, said:
"As a fourth significant investment, Speed Fibre represents a further strategic milestone for the Company. Speed Fibre operates in a new market for CORD where data consumption growth is expected to be among the highest in Europe. This provides additional portfolio cash flow supported by high visibility revenues from wholesale contracts with global blue-chip customers and offers the potential to generate long-term value and attractive returns to shareholders."
Steven Marshall, Chairman of Digital Infrastructure at Cordiant Capital, added:
"We are delighted to add another pillar to the Company's portfolio. Speed Fibre is uniquely positioned as the leading independent national fibre and wireless backhaul operator and is poised to play an expanding role in Ireland's digital economy. We expect to drive organic growth from existing customer traffic on its current network plus invest growth capex in new strategic fibre projects around Ireland and beyond."
Benn Mikula, Co-CEO and Managing Partner at Cordiant Capital, added:
"Speed Fibre is a further step in the growth and diversification of the Company's portfolio. We are deploying capital into a key market in Western Europe's evolving data economy. Moreover, Speed Fibre's position as an important wholesale fibre and backhaul platform offers growth potential and complementarity with other digital infrastructure assets. The Transaction reinforces our 'Buy, Build & Grow' strategy."
Analyst and Investor Call
The Investment Manager will host a remote presentation for analysts at 9.00 a.m. BST today and a remote presentation for institutional investors at 11.00 a.m. BST. For those wishing to log in to the analyst call, please contact Ali AlQahtani at Celicourt via CDI@celicourt.uk. For those wishing to log in to the investor call, please contact the Company's Brokers, Investec Bank plc and Jefferies International Limited, for participation details.
For further information, please visit www.cordiantdigitaltrust.com or contact:
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Cordiant Capital Inc. |
+44 (0) 20 7201 7546 |
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Investment Manager |
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Stephen Foss, Managing Director |
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Aztec Financial Services (Guernsey) Limited |
+44 (0) 1481 748831 |
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Company Secretary and Administrator |
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Chris Copperwaite / Laura Dunning |
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Investec Bank plc |
+44 (0) 20 7597 4000 |
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Joint Corporate Broker |
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Tom Skinner (Corporate Broking) |
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Lucy Lewis / Denis Flanagan (Corporate Finance) |
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Jefferies International Limited |
+44 (0) 20 7029 8000 |
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Joint Corporate Broker |
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Stuart Klein / Gaudi Le Roux |
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Celicourt |
+44 (0) 20 7770 6424 |
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Financial Communications Advisor |
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Philip Dennis / Felicity Winkles / Ali AlQahtani |
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About CORD
Cordiant Digital Infrastructure Limited primarily invests in the core infrastructure of the digital economy - data centres, fibre-optic networks and telecommunication and broadcast towers in Europe and North America. Further details about the Company can be found on its website at www.cordiantdigitaltrust.com.
The Company is a sector-focused specialist owner and operator of digital infrastructure listed on the London Stock Exchange under the ticker CORD. In total the Company has successfully raised £795 million in equity, deploying the proceeds into three transactions: Emitel; CRA; and Hudson Interxchange, which offer stable, often index-linked income, and the opportunity for growth, in line with the Company's Buy, Build & Grow model. In June 2022, the Company signed a €200 million Eurobond facility with four European financial institutions, providing fresh committed capital to invest in the existing portfolio and finance new transactions.
About the Investment Manager
Cordiant Capital Inc. (the Investment Manager), the Company's investment manager, is a sector-specialist investor with particular expertise and experience in digital infrastructure. It invests in global infrastructure and real assets, running infrastructure private equity and infrastructure private credit strategies through limited partnership funds and managed accounts. Its current client base consists of global insurance companies, pension plans and family offices.
About Speed Fibre Group
Speed Fibre, Ireland's leading open access fibre infrastructure provider, includes Enet and Magnet Plus. Further details about Speed Fibre can be found on its website at www.speedfibregroup.ie
Enet is the manager of Ireland's 88 metropolitan area networks (MANs) - fibre rings that connect 94 large regional towns to high-speed international networks. Aside from managing the MANs, under a government concession, Enet has a managed services contract for Irish Rail's long-distance fibre backhaul network. It also owns key infrastructure such as the T5 ring which circles the M50 and connects many of the country's biggest data centres. In total, Enet manages or owns 5,400km of fibre. The concession to run the MANs lasts until March 2030.
Magnet Plus operates the country's largest independent connectivity network. It provides connectivity for some of the world's biggest technology companies, as well as telecommunications, data connectivity, and security services to both commercial and residential markets in Ireland, throughout Europe, the US and beyond.
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