StarHub To Acquire Majority Stake in MyRepublic’s Broadband Business
StarHub recently announced it would acquire a majority interest in MyRepublic's broadband business in Singapore to provide residential and enterprise customers broadband services.
The company stated that the proposed acquisition deal would consolidate and significantly strengthen its position in Singapore's broadband market by 40% while steering its long-term business growth. The deal is also expected to create mutually beneficial opportunities through scale and synergies with future StarHub wholesale offerings, joint go-to-market opportunities and cost savings.
Besides the broadband service, residential and enterprise customers will be able to enjoy "enhanced offerings" from StarHub, including a more extensive product suite, over-the-top content, cloud gaming and other experiences.
The acquisition deal is currently priced at S$70.8 million for 50.1% shares of MyRepublic Broadband, along with a deferred consideration of up to S$92 million should future financial performance matrices are met StarHub said. When combined, StarHub's total investment in the acquisition deal would be S$162.8 million.
MyRepublic, meanwhile, will retain the remaining 49.9% shares and will continue to be led by its senior management team under its Co-Founder and CEO, Malcolm Rodrigues, who called the acquisition deal a milestone that will propel the company towards an IPO.
StarHub also agreed to extend a S$74.2 million loan to MyRepublic to refinance its MyRepublic Holdings in a three-year period once the deal is closed, which is expected to happen by December 2021. Additionally, MyRepublic Broadband will become a StarHub subsidiary upon the acquisition deal's completion.
With a 6% share of Singapore's broadband market, MyRepublic and its broadband business has built a strong brand with a loyal customer base, StarHub said. The company recorded a revenue of S$63.9 million for the financial year ended 2021. Should the acquisition deal go through in December 2021, MyRepublic's earnings per share would rise to S$8.99 from S$8.66.
The company, however, is not without its flaws. MyRepublic discovered its third-party data storage platform was compromised by unauthorised personnel on 29 August 2021. The breach resulted in the theft of around 80,000 of its mobile subscribers' personal data in Singapore. The company, however, stated it did not lack vigilance as it is in full compliance with the PDPA and the Infocomm Media Development Authority's regulations.
Written by John Paul Joaquin
