The Australian fibre player, Vocus is ready to significantly extend its reach by investing a considerable sum of A$6.3 billion ($4.2 billion) to acquire a part of TPG Telecoms’ enterprise, wholesale, and government assets, one of them being its wholesale infrastructure wing – Vision Network.
The proposed deal is currently in negotiation and was made public through a stock exchange filing by TPG. The filing states the current offer as being “highly conditional,” “indicative,” and “not binding.” Vocus has been granted an exclusive period of due diligence until September 6. However, the Board of TPG disclosed that they haven’t yet decided to accept any proposal, leaving space for uncertainty about whether a finalised transaction will take place or not.
In May last year, TPG went on record to have sold and leased back its remaining mobile towers, and later shifted focus toward its fixed assets. September 2022 marked the reorganisation of its overflowing broadband networks under a fully owned but functionally distinct wholesale brand – Vision Network. This wholesale brand consists of different networks including FTTP, FTTB, HFC, and FTTN and covers approximately 410,000 premises mainly in metropolitan areas.
Vision Network was up for strategic review and was on sale for potential buyers at an asking price of around A$1 billion for a 70-80% stake, with the help of Bank of America. TPG also affirmed that the unit had an active subscriber base of 135,000 and estimated to have a turnover of A$100 million in 2023. However, no firm commitment was agreed, and now, Vocus seems to eye not only Vision Network but also a part of TPG’s government, wholesale and enterprise operations, marking the bigger offer.
The interest from Vocus in TPG clearly exhibits the continuous attempts by private equity to take advantage of the constant demand for data and connectivity. Vocus is collectively governed by Macquarie Infrastructure and Real Assets (MIRA), and Aware Super. Nonetheless, being a direct rival to TPG in the enterprise, government, and other wholesale sectors with a 25,000 km fibre network, this deal can potentially appreciate Vocus’ influence in the stated markets if an agreement is achieved. TPG, on the other hand, could utilise this acquisition to reduce its net debt of A$3.7 billion and concentrate its expenditures on services.
However, considering the amount of time Vision Network has been up on sale and the number of prospective buyers that have come and departed, this deal is far from finalised. Stay tuned for the latest updates in the telecommunications world.
