REG - Digital 9 Infrastr. - Verne Global Sale Completion

Digital 9 InfrastructureAnnouncement

15/03/2024 07:00

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RNS Number : 9600G  Digital 9 Infrastructure PLC  15 March 2024

15 March 2024

 

DIGITAL 9 INFRASTRUCTURE PLC

 

("D9" or the "Company" and, together with its subsidiaries, the "Group")

 

Verne Global Sale Completion

 

 

The Board of D9 (the "Board") is pleased to announce that it has completed the
sale of the Company's entire stake in the Verne Global group of companies
("Verne Global") to funds managed or advised by Ardian France SA ("Ardian")
for an equity purchase price of up to US$575 million (approximately £450
million*) (the "Verne Transaction"), in line with the equity purchase price
communicated by the Company in the announcement on 27 November 2023. Following
the Verne Transaction's completion the Company has received US$415 million
(£325.8 million) (the "Initial Purchase Price"). The completion follows
receipt of all applicable regulatory approvals and the satisfaction of all
conditions in line with the previously communicated timetable.

 

As noted in the Company announcement on 27 November 2023, the purchase price
also comprises:

 

i.    US$25 million (approximately £19.5 million*) of a deferred
consideration payment which is payable on the earlier of 15 business days
after the date on which a new power agreement is entered into and 26 April
2024 (the "Deferred Consideration"), and

 

ii.   A potential earn-out payment of up to US$135 million (approximately
£106 million*), which is payable subject to Verne Global achieving run-rate
EBITDA targets for the financial year ending December 2026 (the "Performance
Target").  The total earn-out will be payable if 100% of the Performance
Target is met and will be reduced on a sliding scale with no earn-out being
payable if Verne Global does not achieve 80% of the Performance Target. This
target is as set in the business plan provided to all potential purchasers at
the time of the sale process.

 

The Company believes that Ardian's own value creation objectives are aligned
with deploying the requisite capital expenditures to enable Verne Global to
deliver in line with or close to the Performance Target.  The Company has no
capital expenditure obligations to Verne Global going forward.  The Company
also benefits from customary protections to ensure Verne Global continues
operating and reporting substantially in line with existing practices,
including quarterly updates on its run-rate EBITDA achievements.

 

As previously announced, the Verne Transaction closing will enable the Company
to significantly deleverage its balance sheet and provide the cash resources
necessary for the Company to strengthen its financial position.

 

The Initial Purchase Price proceeds received will be used as follows:

 

·            £273.5 million will go towards repayment and partial
cancellation of the Revolving Credit Facility ("RCF");

·            Up to £17 million will be used to pay costs
incurred in relation to the Verne Transaction;

·        Around £12 million will be retained to cover future
operational expenses of the Company if and when required; and

·          Around £23 million will be retained for prudent capital
management to cover for possible future liabilities arising from certain
Value-Added Tax related indemnification provisions and will be available for
additional RCF repayment and cancellation if and when an insurance policy to
cover these potential future liabilities will be taken out.

 

Following receipt of the Deferred Consideration, an additional repayment and
cancellation of the RCF of approximately £19.5 million* will be made,
reducing the residual RCF to approximately £80 million.

 

If approved by shareholders at the upcoming General Meeting on 25 March 2024,
the Company intends to use equity proceeds generated by the orderly disposal
of the Company's wholly-owned assets to fully repay and cancel the residual
RCF.

 

* GBP amounts based on a 1.28 USD/GBP exchange rate as of 13 March 2024.

 

ENDS.

 

FOR FURTHER INFORMATION ON THE COMPANY, PLEASE CONTACT:

 

 

   Triple Point Investment Management LLP          +44 (0)20 7201 8989

   (Investment Manager)                            D9contact@triplepoint.co.uk

   Diego Massidda

   Ben Beaton

   Arnaud Jaguin
   J.P. Morgan Cazenove (Joint Corporate Broker)   +44 (0)20 7742 4000

   William Simmonds

   Jérémie Birnbaum
   Peel Hunt (Joint Corporate Broker)              +44 (0) 20 7418 8900

   Luke Simpson

   Huw Jeremy

 

 

About Digital 9 Infrastructure plc:

Digital 9 Infrastructure plc (DGI9) is an investment trust listed on the
London Stock Exchange and a constituent of the FTSE All-Share, with the ticker
DGI9. The Company invests in the infrastructure of the internet that underpins
the world's digital economy: digital infrastructure.

 

The Investment Manager is Triple Point Investment Management LLP ("Triple
Point") which is authorised and regulated by the Financial Conduct Authority.
For more information on the Investment Manager please
visit www.triplepoint.co.uk
(https://eur03.safelinks.protection.outlook.com/?url=https%3A%2F%2Furldefense.com%2Fv3%2F__http%3A%2Fwww.triplepoint.co.uk__%3B!!O2kDR7mm-zSJ!q-IhiRmOFrs2QYD7gmr9EcM8ukutg1_xde5Fce9GgBpHkvhSc3nlYhW7glbEiZG--1yRCrGc2K4WAjub3ANF%24&data=05%7C01%7CHelen.Richardson%40triplepoint.co.uk%7C736257c2b4244d9b148e08dbce910edc%7Ccde8812e0dbd4dc3b4463655beb81efb%7C0%7C0%7C638330894771285360%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=2SpCRgIybR8ARfciJBsE4bOmxNcDDFvRX9K9FehSEto%3D&reserved=0)
. For more information, please visit www.d9infrastructure.com
(https://eur03.safelinks.protection.outlook.com/?url=https%3A%2F%2Furldefense.com%2Fv3%2F__http%3A%2Fwww.d9infrastructure.com__%3B!!O2kDR7mm-zSJ!q-IhiRmOFrs2QYD7gmr9EcM8ukutg1_xde5Fce9GgBpHkvhSc3nlYhW7glbEiZG--1yRCrGc2K4WArD5RA1-%24&data=05%7C01%7CHelen.Richardson%40triplepoint.co.uk%7C736257c2b4244d9b148e08dbce910edc%7Ccde8812e0dbd4dc3b4463655beb81efb%7C0%7C0%7C638330894771285360%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=%2Fd%2FuhyGQHTb%2Ft4t2e4NW5UNYk%2FYmW1xyb%2B%2BalYftf5I%3D&reserved=0)
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