Completed with funding from the Australian government, through Export Finance Australia, the transaction values Digicel Pacific at up to US$1.85 billion.
This figure includes a three-year earnout provision of $250 million, which equates to approximately 8.3 times adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) of approximately $222 million for the fiscal year ended March 31, 2021.
“Having established our operations in the Pacific as a start-up in 2005, we take great pride in a team that has provided affordable, best-in-class communications to more than 10 million people in six of most exciting economies in the region,” said Denis O’Brien, Founder and Chairman of Digicel Group.
“I am deeply grateful to all of our colleagues who have contributed to this success and in particular to our 1,700 employees in the Pacific who I know will continue to represent the Digicel brand with pride under the new Telstra owners. success for the future.”
In addition, a payment of $1.6 billion will go to Digicel Group at closing and the company also expects to reach the maximum earn-out payment of $50 million in accordance with the first revenue-based earn-out period. services.
“Through 2020, I had the privilege of serving as CEO of our Digicel Pacific operations for many years and working with some exceptional people in this high performing, high growth company,” added Oliver Coughlan. , Group Chief Executive, Telstra.
“They retain our appreciation and friendship. Following this transaction, Digicel is well positioned to support the continued growth of our well-invested networks in our 25 Caribbean and Central American markets.”
Officially announced in October 2021, the deal is expected to strengthen Telstra’s offering in the South Pacific, which CEO Andrew Penn described as “a unique and very attractive business opportunity” for the company.
“Beyond the economics of the deal, the business aligns with Telstra’s core strengths and our decades of experience in delivering international connectivity in the Pacific region. It will also strengthen our role as a provider of international voice and data and ICT services in the region,” he added at the time.
Digicel Pacific operates in Papua New Guinea, Fiji, Samoa, Vanuatu, Tonga and Nauru, and has already confirmed that there will be no changes to the Digicel brand and that the current management team will continue to run the business.
Capacity spoke at length with Digicel Pacific CEO Shally Jannif about the deal and growing industry trends in these markets in the June/July issue of Capacity Magazine. Read the full conversation here.
Along with this announcement, the Digicel Group has also confirmed that the Independent State of Papua New Guinea has agreed to enter into a binding international arbitration process, which is taken in Singapore.
Through arbitration, the two parties seek to resolve the disputed one-time exit tax of 350 million PGK ($99.4 million) and possibly waive another claim of 50 million PGK ($14.2 million). million) due to non-payment of tax to date.