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Digital 9 Infrastructure to acquire 48% stake of Arqiva

Deal Handshake

Investment firm Digital 9 Infrastructure has agreed the terms of an acquisition of a 48% voting stake in UK network and communications infrastructure firm Arqiva Group.

It will cost Digital 9 £300 million and a £159 million ‘non-recourse vendor loan note’ to buy the shares from Canada Pension Plan Investment Board CPP Investments, which itself acquired the stake in Arqiva in 2009.

UK based Arqiva owns 1,450 broadcast transmission sites, 80 satellite ground stations which access over 30 third-party owned satellites and broadcast 1100 channels around the world, and an IoT utilities connectivity platform, which it says over 12 million premises are connected to.

“We believe the safe and reliable access to data and content across multiple devices and the closer connectivity between broadcasters, utilities and their customers will contribute to the UK’s sustainable economic development,” said Phil Jordan, Chair of Digital 9 Infrastructure. “Arqiva is a long-standing trusted communications infrastructure operator in the UK and complements our investment mandate to build resilient infrastructure, promote inclusive and sustainable industrialisation, and foster innovation. Arqiva expands the Company’s exposure to wireless networks and will support the Company’s total return and yield targets as we continue to build a high-quality portfolio of scalable platforms and technologies.”

Thor Johnsen, Head of Digital Infrastructure at Triple Point Investment Management, who appears to have been involved in the orchestration of the deal, added: “The core, contracted nature of Arqiva’s national broadcasting service is complemented by its high growth and innovative smart metering and connectivity solutions. The business benefits from the utility sector’s need to manage data more effectively across networks, whilst it continues to maintain long-term cash flow from its national broadcasting service.”

Digital 9 lists a series of reasons it is making the purchase, including a desire to diversify its portfolio. Less easy to follow is the listed reason: “Enabling connectivity to those unable to access or afford modern internet access; Arqiva is the only means by which just under 8 million adults access TV. Included in this group are some of the most vulnerable in society; 3 million of these people live alone, 4 million belong to the C2DE socio-economic group, and nearly 1.8 million have a disability.”

That might all be true, but of course there is one reason any firm acquires a stake in other firms or buys them out entirely – it thinks there will be a financial benefit to do so.

 

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