Digital 9 buys Irish wireless network – Digital 9 Infrastructure says that its subsidiary, Digital 9 Wireless has signed a conditional sale and purchase agreement to buy a majority (56%) stake in Tetra Ireland Communications, the exclusive operator of public safety wireless networks across the Republic of Ireland. The total price is about €76m and there may be a chance to buy the other 44%, which would increase the total cost to approximately €136m.
With this transaction, Digital 9 has now deployed or committed substantially all of its available capital.
TETRA Ireland is the exclusive operator of public safety communication networks across the Republic. It owns and operates the National Digital Radio Service, a purpose-built, secure, digital mobile network, developed using “Terrestrial Trunked Radio” technology.
TETRA Ireland’s network provides a high reliability and mission critical infrastructure service across Eire, providing over 98% geographic coverage (including offshore, mountainous regions and remote rural locations), with an historical 99.97% network uptime and 24/7 customer care.
Compared to traditional commercial mobile network service, the TETRA Ireland network provides a higher level of security, resilience and redundancy in even the most rural areas which is required for public safety and emergency services.
Around 97% of TETRA Ireland’s customer base is Republic of Ireland government public bodies – around 70 agencies with some 24,000 active subscribers – principally across emergency services, local government and public services, including the police, ambulance services, the Irish Coast Guard, fire services and the Irish Prison Service.
Pricing and service terms for usage by TETRA Ireland’s customers are guaranteed by long-term, inflation linked contracts.
They say that the expected underlying earnings of this transaction are highly supportive of the dividend policy.
The company has signed a conditional sale and purchase agreement to buy the initial stake from eircom.
This is Digital 9’s first investment into wireless infrastructure, one of the four target digital sub-sectors.
Fundraise
Unsurprisingly, with all funds committed, the company is looking for more. A placing has been launched at 108p per share, targeting gross proceeds of approximately £200m. The placing price represents a 1.5% discount to the closing price of 109.6p on 12 January 2022 and a 4.5% premium to the 30 June 2021 NAV of 103.34p.
The company has identified an immediate term pipeline of approximately £325 million, part of a near term pipeline of approximately £500m and a total pipeline of approximately £1.8bn. To assist in short term funding, the manager is in the process of arranging a new syndicated revolving credit facility of up to £300m.
DGI9 : Digital 9 buys Irish wireless network