StarHub to buy majority stake in MyRepublic's Singapore broadband business

StarHub to buy majority stake in MyRepublic's Singapore broadband business

SINGAPORE – Local telco StarHub will be buying a majority 50.1 per cent stake in rival Internet service provider MyRepublic’s broadband business for residential and enterprise customers in Singapore, which itself was initially started by a former StarHub subsidiary executive.

Announcing this on Wednesday (Sept 22), the two companies said that 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”.

MyRepublic currently has a 6 per cent share of the broadband market here.

The transaction is expected to close by December, subject to the fulfilment of mutually agreed conditions and regulatory approvals.

The Internet service providers added that MyRepublic’s broadband customer base will stand to benefit from StarHub’s consumer and enterprise business 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 usually exclude services offered by cable or broadcast providers such as bundled cable TV channels.

The acquisition involves a StarHub wholly owned subsidiary, StarHub Online, buying a majority interest in a new business entity, MyRepublic Broadband, which holds MyRepublic’s broadband business here.

MyRepublic also has broadband businesses in Australia and New Zealand, offers mobile services in Singapore, and has licensing deals in Brunei and Indonesia.

StarHub’s total investment in MyRepublic will be up to $162.8 million. There will be an initial consideration of $70.8 million for 50.1 per cent of shares in 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 has also agreed to refinance $74.2 million of MyRepublic’s debt for three years.

MyRepublic will retain the remaining 49.9 per cent stake in MyRepublic Broadband.

The Wednesday statement said that MyRepublic’s senior management team, led by its co-founder and chief executive Malcolm Rodrigues, will continue to lead MyRepublic Broadband “with the same principles and values that have steered the company to its current position as a Singaporean household brand from its inception a decade ago”.

MyRepublic was started about 10 years ago and launched its broadband services in 2012.

Prior to MyRepublic, Mr Rodrigues was head of sales and marketing at Nucleus Connect, a StarHub subsidiary that manages and runs the Next-Generation Nationwide Broadband Network that fuelled the growth of fibre broadband in Singapore.

In August, MyRepublic said it had appointed former StarHub veteran Jeannie Ong as its group chief investor relations officer, a new role in the company.

Ms Ong was StarHub’s former chief strategic partnership officer and chief marketing officer. She was part of the team that helped with StarHub’s initial public offering (IPO) in 2004 and left the telco after serving 17 years.

MyRepublic had said that Ms Ong would head moves to establish and maintain relationships with investors and stakeholders, with a view of leading the company to an IPO.

The IPO has been delayed a few times. In 2019, the company said that it had planned to go public in Hong Kong by end-2020. Earlier, it had pushed back its debut from late-2018 to mid-2020.

On Wednesday’s announcement, StarHub chief executive Nikhil Eapen said: “We stand to mutually benefit from StarHub’s digital-first technology platforms, our challenger mindset in innovation and customer-centricity, and MyRepublic’s lean operating model and experiences in regional markets.”

“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,” he added.

Mr Rodrigues said that StarHub’s investment and partnership with MyRepublic “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,” he said. “More importantly, this milestone propels us forward in MyRepublic’s journey towards an IPO.”

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