Fri, 19 Apr 2024
16:39:51
Dial Deal:
14 Dec 2011
21:01:15
Dialog seals merger deal with Suntel
Dec 14, 2011 (SLBO) - Dialog Broadband Networks Private Limited (DBN), a fully owned subsidiary of Sri Lanka's premier mobile services provider Dialog Axiata PLC on Wednesday entered into a Share Purchase Agreement (SPA) to acquire 100% of the ordinary shares of wireless fixed line operator- Suntel Ltd from its current shareholders.
The definitive execution of the acquisition will follow the satisfaction of conditions precedent to the transaction defined in the SPA. The successful consummation of the transaction during the course of the next few months is envisaged to lead to the merger of the operations of DBN and Suntel and the creation of a merged entity, providing advanced fixed line and broadband services to Sri Lankan consumers.
Suntel commandeers a premium position in Sri Lanka's fixed telecommunications sector and is ranked second in the sector in terms of fixed telecommunications business and Revenue Market share. Suntel commenced operations in 1996 and is currently a subsidiary of Swedish telecom operator Overseas Telecom AB. Other shareholders of Suntel include NDB (National Development Bank PLC), C-Tech Investments (Private) Ltd, Kelmarsh Investments Ltd, Townsend Limited and International Finance Corporation (IFC).
"The Sri Lankan telecom sector after 15 years of robust growth is soliciting consolidation," Jerry Huxtable, Managing Director of Suntel said. "Suntel is committed to providing a superior service to our loyal customer base, and today are at a point in our evolution where bullish and forward thinking investments are needed to elevate our broadband infrastructure to best in class standards."
"I believe industry consolidation which crystallises economies of scale and brings together the shared effort and investment capacity of leading industry players is an optimum strategy to deliver enhanced value to consumers and the industry at large going forward. The agreement entered in to by our shareholders with DBN paves the way for a renewed thrust of investment in Sri Lanka's fixed telecommunications and broadband sector which I believe will be of benefit to all stakeholders."
Suntel's fixed telecommunications infrastructure is based on a 382 base station strong network delivering fixed voice, broadband and data communication services using CDMA, WiMAX and other fixed wireless access technologies.
DBN, a fully owned subsidiary of Dialog Axiata PLC, was the 4th entrant to Sri Lanka' fixed telecommunications sector in 2006 and has since consolidated a robust and rapidly growing position in the sector based on its portfolio of fixed telecommunications, broadband and optical fibre based transmission infrastructure services. Since becoming a member of the Dialog Axiata Group in 2006, the company has invested Rs 11.8Bn in the expansion of its fixed telecommunications and broadband infrastructure with a particular focus on the development of its optical fibre network which is being rolled out on a nationwide basis.
The share purchase agreement signed between DBN and the shareholders of Suntel envisages the transaction to be completed at an EV (Enterprise Value) in the range of USD 33.9Mn to USD 34.9Mn, corresponding to a Valuation Multiple of 3.0x- to 3.1x of FY10 EBITDA, subject to the outcome of confirmatory business valuation and due diligence during the period leading up to the completion of the transaction. The transaction, leading ultimately to the merger of Suntel with DBN will secure the distinction of being the single largest consolidation initiative within Sri Lanka's Telecommunications sector. Following the entering in to of the SPA, parties to the transaction expressed their appreciation for the facilitation and enablement received from the Telecommunications Regulatory Commission of Sri Lanka, the Board of Investment and agencies of the Ministry of Finance, and also for the execution support extended by advisors J.P. Morgan, MacQuarie Capital, Mannheimer Swartling, F.J. & G. De Sarams, Dr Shivaji Felix, John Wilson and escrow agents Standard Chartered Bank PLC.
The definitive execution of the acquisition will follow the satisfaction of conditions precedent to the transaction defined in the SPA. The successful consummation of the transaction during the course of the next few months is envisaged to lead to the merger of the operations of DBN and Suntel and the creation of a merged entity, providing advanced fixed line and broadband services to Sri Lankan consumers.
Suntel commandeers a premium position in Sri Lanka's fixed telecommunications sector and is ranked second in the sector in terms of fixed telecommunications business and Revenue Market share. Suntel commenced operations in 1996 and is currently a subsidiary of Swedish telecom operator Overseas Telecom AB. Other shareholders of Suntel include NDB (National Development Bank PLC), C-Tech Investments (Private) Ltd, Kelmarsh Investments Ltd, Townsend Limited and International Finance Corporation (IFC).
"The Sri Lankan telecom sector after 15 years of robust growth is soliciting consolidation," Jerry Huxtable, Managing Director of Suntel said. "Suntel is committed to providing a superior service to our loyal customer base, and today are at a point in our evolution where bullish and forward thinking investments are needed to elevate our broadband infrastructure to best in class standards."
"I believe industry consolidation which crystallises economies of scale and brings together the shared effort and investment capacity of leading industry players is an optimum strategy to deliver enhanced value to consumers and the industry at large going forward. The agreement entered in to by our shareholders with DBN paves the way for a renewed thrust of investment in Sri Lanka's fixed telecommunications and broadband sector which I believe will be of benefit to all stakeholders."
Suntel's fixed telecommunications infrastructure is based on a 382 base station strong network delivering fixed voice, broadband and data communication services using CDMA, WiMAX and other fixed wireless access technologies.
DBN, a fully owned subsidiary of Dialog Axiata PLC, was the 4th entrant to Sri Lanka' fixed telecommunications sector in 2006 and has since consolidated a robust and rapidly growing position in the sector based on its portfolio of fixed telecommunications, broadband and optical fibre based transmission infrastructure services. Since becoming a member of the Dialog Axiata Group in 2006, the company has invested Rs 11.8Bn in the expansion of its fixed telecommunications and broadband infrastructure with a particular focus on the development of its optical fibre network which is being rolled out on a nationwide basis.
The share purchase agreement signed between DBN and the shareholders of Suntel envisages the transaction to be completed at an EV (Enterprise Value) in the range of USD 33.9Mn to USD 34.9Mn, corresponding to a Valuation Multiple of 3.0x- to 3.1x of FY10 EBITDA, subject to the outcome of confirmatory business valuation and due diligence during the period leading up to the completion of the transaction. The transaction, leading ultimately to the merger of Suntel with DBN will secure the distinction of being the single largest consolidation initiative within Sri Lanka's Telecommunications sector. Following the entering in to of the SPA, parties to the transaction expressed their appreciation for the facilitation and enablement received from the Telecommunications Regulatory Commission of Sri Lanka, the Board of Investment and agencies of the Ministry of Finance, and also for the execution support extended by advisors J.P. Morgan, MacQuarie Capital, Mannheimer Swartling, F.J. & G. De Sarams, Dr Shivaji Felix, John Wilson and escrow agents Standard Chartered Bank PLC.
© Sri Lanka Business Online,
All Rights Reserved.