By Tricia See
SINGAPORE — StarHub plans to acquire a majority 50.1 per cent stake in MyRepublic's broadband business in Singapore to strengthen its position in the market.
StarHub’s total investment will be up to S$162.8 million, with an initial S$70.8 million for the 50.1 per cent stake, and a deferred consideration of up to S$92 million should future financial performance matrices be met, according to a statement to the Singapore stock exchange.
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. The deal will be funded using StarHub’s internal cash resources.
StarHub said the proposed transaction will help boost its local market share to 40 per cent and steer long-term business growth. Republic Broadband is a profitable and growing business and currently holds 6 per cent share of Singapore’s broadband market, StarHub said.
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, the telco said.
MyRepublic will retain the remaining 49.9 per cent stake and its senior management team, helmed by co-founder and chief executive officer Malcolm Rodrigues.
"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," Nikhil Eapen, StarHub's chief executive officer, said.
Upon completion of the acquisition, MyRepublic Broadband will be a StarHub subsidiary. The deal is expected to close by December, subject to the fulfilment of mutually agreed conditions and regulatory approvals.