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Vocus grows telecom infrastructure network
The acquisition of a national fibre network and various cable connections by Vocus has signalled a move by the telecommunication group to expand its infrastructure network.
Melissa Coade
Firms: Allens (Vocus Communications Ltd); Baker & McKenzie (Nextgen Networks; North West Cable System; Australia Singapore Cable)
Value: $807 million
Area: M&A
Key players: The Allens team was led by corporate partner Mark Malinas (pictured), alongside corporate partner Robert Simkiss, equity capital markets co-heads Julian Donnan and Robert Pick, and competition practice lead Fiona Crosbie.
Deal significance: Vocus Communications has expanded its infrastructure network by moving to acquire Nextgen Networks and its target entities North West Cable System; Australia Singapore Cable.
The capital raising for the acquisitions is expected to have finalised this month, and completion of the acquisitions within about three months, subject to ACCC clearance.
Nextgen Networks is one of Australia's largest national fibre backhaul networks. It connects mainland capital cities with major regional centres and covers approximately 17,000 kilometres.
The NWCS is a submarine cable construction project that will connect Darwin and Port Hedland, while the ASC will connect Singapore, Jakarta and Perth.
According to a release issued by Allens, the decision to undertake a PAITREO structure was designed to optimise the potential for Vocus shareholders to either participate or have an opportunity to realise some value for their rights.
Allens partner Mark Malinas, who led the team advising Vocus on the deal, said that the acquisitions reflect a broader trend of consolidation in the telecom industry.
"We are increasingly seeing telecommunications companies acquiring long-standing broadband and infrastructure providers," Mr Malinas said.
"We are delighted to continue our relationship with Vocus as they move on to greater heights, having also advised on the Vocus and M2 merger last year," he added.
Commenting on the deal, Vocus general counsel and company secretary Ashe-lee Jegathesan said: "The Allens team, as usual, provided us with exceptional support, with very commercial and pragmatic advice. Their understanding of our business meant they were able to bring potential risks to our attention that may not otherwise have been considered, and meant that these were well mitigated."
Allens also advised Vocus on a $652 million capital raising to fund the acquisition. The capital raising took the form of a fully underwritten, accelerated renounceable entitlement offer (with retail rights trading) and a fully underwritten institutional placement.
