REG - Cordiant Digital Inf - Acquisition of Speed Fibre Group

Cordiant Digital InfrastructureAnnouncement

24/08/2023 07:00

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RNS Number : 2739K  Cordiant Digital Infrastructure Ltd  24 August 2023

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24 August 2023
 

LEI: 213800T8RBBWZQ7FTF84

 

Cordiant Digital Infrastructure Limited

Acquisition of Speed Fibre Group

 

Cordiant Digital Infrastructure Limited (the "Company" or "CORD"), an
operationally focused specialist digital infrastructure investor, is pleased
to announce that it has entered into an agreement to acquire the entire issued
share capital of Speed Fibre DAC ("Speed Fibre"), Ireland's leading open
access fibre infrastructure provider (the "Transaction"). Speed Fibre is being
acquired from the Irish Infrastructure Fund for a total enterprise value of
€190.5 million. The equity consideration of €97 million will be funded by
€68 million in cash and €29 million through a vendor loan note with an
initial interest rate of 6% and a maturity of four years.

On closing, Speed Fibre will be the fourth digital infrastructure platform
acquired by the Company since its launch in 2021 and is consistent with its
investment programme of buying strategic, cash flow generating platforms under
its "Buy, Build & Grow" model. The acquisition further diversifies CORD's
portfolio on a sub-sector and geographic basis. The Transaction is subject to
customary regulatory approvals in Ireland and the United Kingdom and is
expected to close later this year.

Speed Fibre operates 5,400 kilometres of owned and leased fibre and wireless
backhaul across Ireland, on which it provides dark fibre, wavelength and
ethernet services to a mix of carriers, internet service providers, corporate
customers, and the government. The business is also well-positioned to serve
Ireland's growing data centre sector, which is expected to be the fastest
growing hyperscale data centre market in Western Europe over the next six
years. While primarily a backbone provider, Speed Fibre's subsidiary, Magnet
Plus, provides connection and service to approximately 10,000 business and
retail customers in Ireland.

With a stable business model, sales growth and high revenue and cash flow
visibility, Speed Fibre generated revenues of c. €80 million and EBITDA of
c. €23 million in 2022. Outstanding gross debt of c. €111 million as at
December 2022 and which matures in 2029 is provided by three bank lenders, all
of whom have committed to continue to support Speed Fibre under the Company's
ownership.  Gross debt was balanced by c. €19 million of cash on hand at
year end 2022.

Speed Fibre has a strong ESG and sustainability focus, earning a 5-star rating
from GRESB, an independent organisation providing validated ESG performance
data, and is targeting net zero carbon emissions by 2040.

 

 

 

Shonaid Jemmett-Page, Chairman of Cordiant Digital Infrastructure Limited,
said:

"As a fourth significant investment, Speed Fibre represents a further
strategic milestone for the Company. Speed Fibre operates in a new market for
CORD where data consumption growth is expected to be among the highest in
Europe. This provides additional portfolio cash flow supported by high
visibility revenues from wholesale contracts with global blue-chip customers
and offers the potential to generate long-term value and attractive returns to
shareholders."

Steven Marshall, Chairman of Digital Infrastructure at Cordiant Capital,
added:

"We are delighted to add another pillar to the Company's portfolio. Speed
Fibre is uniquely positioned as the leading independent national fibre and
wireless backhaul operator and is poised to play an expanding role in
Ireland's digital economy. We expect to drive organic growth from existing
customer traffic on its current network plus invest growth capex in new
strategic fibre projects around Ireland and beyond."

Benn Mikula, Co-CEO and Managing Partner at Cordiant Capital, added:

"Speed Fibre is a further step in the growth and diversification of the
Company's portfolio. We are deploying capital into a key market in Western
Europe's evolving data economy. Moreover, Speed Fibre's position as an
important wholesale fibre and backhaul platform offers growth potential and
complementarity with other digital infrastructure assets. The Transaction
reinforces our 'Buy, Build & Grow' strategy."

 

Analyst and Investor Call

The Investment Manager will host a remote presentation for analysts at 9.00
a.m. BST today and a remote presentation for institutional investors at 11.00
a.m. BST. For those wishing to log in to the analyst call, please contact Ali
AlQahtani at Celicourt via CDI@celicourt.uk (mailto:CDI@celicourt.uk) . For
those wishing to log in to the investor call, please contact the Company's
Brokers, Investec Bank plc and Jefferies International Limited, for
participation details.

For further information, please visit www.cordiantdigitaltrust.com
(http://www.cordiantdigitaltrust.com) or contact:

 Cordiant Capital Inc.                             +44 (0) 20 7201 7546
 Investment Manager
 Stephen Foss, Managing Director

 Aztec Financial Services (Guernsey) Limited       +44 (0) 1481 748831
 Company Secretary and Administrator
 Chris Copperwaite / Laura Dunning

 Investec Bank plc                                 +44 (0) 20 7597 4000
 Joint Corporate Broker
 Tom Skinner (Corporate Broking)
 Lucy Lewis / Denis Flanagan (Corporate Finance)

 Jefferies International Limited                   +44 (0) 20 7029 8000
 Joint Corporate Broker
 Stuart Klein / Gaudi Le Roux

 Celicourt                                         +44 (0) 20 7770 6424
 Financial Communications Advisor
 Philip Dennis / Felicity Winkles / Ali AlQahtani

 

About CORD

Cordiant Digital Infrastructure Limited primarily invests in the core
infrastructure of the digital economy - data centres, fibre-optic networks and
telecommunication and broadcast towers in Europe and North America. Further
details about the Company can be found on its website at
www.cordiantdigitaltrust.com (http://www.cordiantdigitaltrust.com/) .

The Company is a sector-focused specialist owner and operator of digital
infrastructure listed on the London Stock Exchange under the ticker CORD. In
total the Company has successfully raised £795 million in equity, deploying
the proceeds into three transactions: Emitel; CRA; and Hudson Interxchange,
which offer stable, often index-linked income, and the opportunity for growth,
in line with the Company's Buy, Build & Grow model. In June 2022, the
Company signed a €200 million Eurobond facility with four European financial
institutions, providing fresh committed capital to invest in the existing
portfolio and finance new transactions.

About the Investment Manager

Cordiant Capital Inc. (the Investment Manager), the Company's investment
manager, is a sector-specialist investor with particular expertise and
experience in digital infrastructure. It invests in global infrastructure and
real assets, running infrastructure private equity and infrastructure private
credit strategies through limited partnership funds and managed accounts. Its
current client base consists of global insurance companies, pension plans and
family offices.

About Speed Fibre Group

Speed Fibre, Ireland's leading open access fibre infrastructure provider,
includes Enet and Magnet Plus. Further details about Speed Fibre can be found
on its website at www.speedfibregroup.ie (http://www.speedfibregroup.ie)

Enet is the manager of Ireland's 88 metropolitan area networks (MANs) - fibre
rings that connect 94 large regional towns to high-speed international
networks.  Aside from managing the MANs, under a government concession, Enet
has a managed services contract for Irish Rail's long-distance fibre backhaul
network. It also owns key infrastructure such as the T5 ring which circles the
M50 and connects many of the country's biggest data centres. In total, Enet
manages or owns 5,400km of fibre. The concession to run the MANs lasts until
March 2030.

Magnet Plus operates the country's largest independent connectivity network.
It provides connectivity for some of the world's biggest technology companies,
as well as telecommunications, data connectivity, and security services to
both commercial and residential markets in Ireland, throughout Europe, the US
and beyond.

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