StarHub is forking out up to $162.8 million to acquire a 50.1% stake in MyRepublic’s broadband business in Singapore, taking out the latter’s 6% share in the local market. This will see the MyRepublic business unit subsumed as a StarHub subsidiary when the transaction is finalised.
MyRepublic carved out a new entity, called MyRepublic Broadband, for the transaction, which would encompass its consumer and enterprise customers in the city-state. StarHub Online, which comprises the telco’s broadband business, would acquire the MyRepublic shares.
The acquisition would push StarHub’s share of the local broadband market to 40%, the two companies said in a joint statement Wednesday. MyRepublic currently has a 6% share of the market.
Industry regulator Infocomm Media Development Authority has set aside S$40 million (US$29.53 million) to support research and development efforts and drive adoption of 5G, which include initiatives focused on key verticals such as urban mobility and maritime.
StarHub’s investment would include an initial consideration of $70.8 million for the 50.1% stake and a $92 million deferred consideration dependent on future financial performance. The Singapore telco also would refinance $74.2 million of debt for MyRepublic over a span of three years, upon completion of the transaction.
The latter would retain 49.9% share, with its senior management team including co-founder and CEO Malcolm Rodrigues remaining in his role. The acquisition was slated to be completed by end-December, subject to the usual regulatory approvals.
The acquisition would provide MyRepublic customers access to StarHub’s range of consumer and business offerings, including over-the-top content and online games. The two companies added that they also would achieve cost savings, scale, and synergies through joint go-to-market opportunities and wholesale service offerings.
StarHub CEO Nikhil Eapen saIs: “We intend to scale up and deliver better and faster services to our customers, while realising high-quality earnings accretion. We stand to mutually benefit from StarHub’s digital-first technology platforms, our challenger mindset in innovation and customer-centricity, and MyRepublic’s lean operating model and experiences in regional markets.”
Rodrigues said: “This milestone propels us forward in MyRepublic’s journey towards IPO. With StarHub onboard as a key investor, we are charting a new course for the long-term direction of the industry.”
In a June 2021 report, MyRepublic told ZDNet it was looking for new revenue in Singapore’s enterprise space, with plans to ramp up its service offerings with particular focus on cybersecurity, where it might look to make acquisitions to plug product gaps. It also had eyes on growing its enterprise business, where it saw large margins and growth potential.
MyRepublic then had some 6,000 enterprise customers including small and midsize businesses and large organisations, as well as 85,000 broadband subscribers in Singapore. As at May 2021, it also had 70,000 mobile subscribers. It launched its mobile business here in 2018.
The Singapore market remains the main revenue source for the operator, which also offers broadband services in Australia and New Zealand. It has a franchise business in Indonesia via a partnership with the Sinar Mas Group.
ZDNet asked for more details on how the StarHub acquisition would impact these businesses and will update this story when responses come in.
MyRepublic earlier this month suffered a third-party security breach that compromised personal data of 79,388 mobile subscribers. The mobile operator had declined to reveal further details about how the data breach was discovered, saying only that it was informed of the incident by “an unknown external party” on August 29.
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