TIDMDGI9
RNS Number : 8107U
Digital 9 Infrastructure PLC
27 November 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED
UNDER THE UK'S MARKET ABUSE REGULATION. UPON THE PUBLICATION OF
THIS ANNOUNCEMENT, SUCH INSIDE INFORMATION IS NOW CONSIDERED TO BE
IN THE PUBLIC DOMAIN.
27 November 2023
DIGITAL 9 INFRASTRUCTURE PLC
("D9" or the "Company" and, together with its subsidiaries, the
"Group")
Verne Global Sale
Highlights
-- The Company has today entered into a definitive agreement for
the sale of its entire stake in the Verne Global group of companies
(which has operations in Iceland, Finland and the United Kingdom)
("Verne Global") to funds managed or advised by Ardian France SA or
any of its affiliates ("Verne Transaction") for an equity purchase
price of up to US$575 million ("Purchase Price") (approximately
GBP456 million). The Purchase Price is comprised of the
following:
o US$440 million (approximately GBP349 million) in cash, split
between US$415 million (approximately GBP329 million) payable on
closing of the Verne Transaction (the "Initial Purchase Price") and
US$25 million (approximately GBP20 million) of a deferred
consideration payment which will be payable on the earlier of (i)
15 days after a new power agreement is entered into (subject to
closing) and (ii) the later of 26 April 2024 and four weeks after
closing ("Deferred Consideration"); plus
o a potential earn-out payment of up to US$135 million
(approximately GBP107 million), which is payable subject to Verne
Global achieving run-rate EBITDA targets for the financial year
ending December 2026 ("Performance Target"). The total earn-out
will be payable if 100% of the Performance Target is met and will
be reduced on a sliding scale with no earn-out being payable if
Verne Global does not achieve 80% of the Performance Target.
-- Closing of the sale of Verne Global is conditional on:
o receipt of applicable merger control approval in Iceland and
Finland and foreign direct investment approval in Finland, which
are currently expected to be received by the end of Q1 2024;
o no material and adverse change in Verne Global's Iceland
business occurring which is directly attributable to any volcanic,
seismic or other similar geological event in Iceland;
o consent of the lenders under the Group's GBP375 million
Revolving Credit Facility ("RCF") (to which the Company is a party)
to certain elements of the Verne Transaction; and
o consent of the lenders under the debt facility in respect of
the Icelandic branch of Verne Global to the change of control which
will arise following completion of the Verne Transaction.
-- The Verne Transaction is the result of a competitive process
which sought to maximise shareholder value from the sale of Verne
Global. Upon closing of the sale, the Verne Transaction enables the
Company to deleverage its balance sheet by paying down
approximately GBP300 million of the RCF (as described in more
detail below).
Transaction Rationale
Under the Company's ownership, and as a result of capital
investments made by the Group since the Company's acquisition of
Verne Global in September 2021 (and the Company's subsequent
acquisitions of Ficolo Oy for and Volta Data Centres in April 2022,
which are now part of the Verne Global group of companies), Verne
Global has generated sustained and accelerated customer demand for
its facilities from both new and existing customers and has an
EBITDA of GBP13.5 million for the last 12 months ending 30 June
2023. [i]
As a result, the Company received interest in Verne Global from
a significant number of investors during the competitive sale
process. As announced on 28 September 2023, the Board received
several non-binding offers for a majority stake in Verne Global.
These offers were more attractive than the indicative offers
received for the syndication of a minority stake in Verne Global
initiated in March 2023.
The Board, with the support of its financial adviser, assessed
the merits of the non-binding offers for a majority stake to
maximise shareholder value. The Board concluded that a sale of the
Company's entire stake in Verne Global was in shareholders' best
interests because it provided an opportunity for the Company to
repay a significant part of D9's RCF and deleverage its balance
sheet.
Strengthening D9's Financial Position
The Initial Purchase Price payable on closing is intended to be
used to pay down approximately GBP300 million of the RCF. The full
amount of this initial repayment could be delayed in the event that
certain indemnification provisions are not replaced by insurance in
the period before closing of the Verne Transaction.
Pending receipt of the Purchase Price, the Company will seek to
secure a financing solution to fund Verne Global through to closing
of the Verne Transaction. As part of prudent contingency planning,
the Company will also be developing a plan to address its residual
financial uncertainty (as disclosed in the Interim Results for the
period ended 30 June 2023) pending receipt of the Purchase
Price.
The Board of Directors of D9 has also announced today that it
has initiated a strategic review of the Company to develop a set of
actions with a view to maximising shareholder value going
forward.
About Ardian
Ardian is a world-leading private investment house, managing or
advising $156bn of assets on behalf of more than 1,470 clients
globally. It is a leading investor in digital infrastructure, with
investments across the full value chain including mobile and fixed
infrastructure networks.
S.
FOR FURTHER INFORMATION ON THE COMPANY, PLEASE CONTACT:
Triple Point Investment Management
LLP
(Investment Manager)
Diego Massidda
Ben Beaton
Arnaud Jaguin
+44 (0)20 7201 8989
Goldman Sachs International (Financial
Adviser on the Verne Transaction)
Alexandre Lucas
Owain Evans
Fabrice Francois
Alexander Tingle +44 (0) 20 7774 1000
FTI Consulting (Communications Adviser) dgi9@fticonsulting.com
Ed Berry +44 (0)7703 330 199
Mitch Barltrop +44 (0)7807 296 032
Maxime Lopes +44 (0) 7890 896 777
The person responsible for making this notification is Luke
Cheshire, Company Secretary.
LEI: 213800OQLX64UNS38U92
About Digital 9 Infrastructure plc:
Digital 9 Infrastructure plc (DGI9) is an investment trust
listed on the London Stock Exchange and a constituent of the FTSE
250, with the ticker DGI9. The Company invests in the
infrastructure of the internet that underpins the world's digital
economy: digital infrastructure.
The Investment Manager is Triple Point Investment Management LLP
("Triple Point") which is authorised and regulated by the Financial
Conduct Authority, with extensive experience in infrastructure,
real estate, and private credit, while keeping ESG principles
central to its business mission. Triple Point's Digital
Infrastructure team has over US$300 billion in digital
infrastructure transaction experience and in-depth relationships
across global tech and global telecoms companies.
The number 9 in Digital 9 Infrastructure comes from the UN
Sustainable Development Goal 9, which focuses the fund on
investments that increase connectivity globally and improve the
sustainability of digital infrastructure. The assets DGI9 invests
in typically comprise scalable platforms and technologies including
(but not limited to) subsea fibre, data centres, terrestrial fibre
and wireless networks.
Since IPO in March 2021, DGI9 has invested in the following data
centres, subsea fibre and wireless network assets (other than Verne
Global):
-- Aqua Comms , a leading owner and operator of 20,000km of the
most modern subsea fibre systems - the backbone of the internet -
with a customer base comprising global tech and global
telecommunications carriers;
-- Arqiva , the only UK national terrestrial television and
radio broadcasting network in the United Kingdom - providing data,
network and communications services, as well as a national IoT
connectivity platform;
-- Elio Networks (previously Host Ireland) a leading enterprise
broadband provider that owns and operates Fixed Wireless Access
networks;
-- EMIC-1 , a partnership with Meta on a 10,000km fibre system from Europe to India;
-- SeaEdge UK1 , a data centre and landing station for the North
Sea Connect subsea cable, part of the North Atlantic Loop subsea
network, improving connectivity between the UK, Ireland,
Scandinavia and North America;
The Company's Ordinary Shares were admitted to trading on the
Specialist Fund Segment of the Main Market of the London Stock
Exchange on 31 March 2021. The Company's Ordinary Shares were
admitted to the premium listing segment of the Official List of the
Financial Conduct Authority and to trading on the premium segment
of the Main Market on 30 August 2022.
For more information on the Investment Manager please visit
www.triplepoint.co.uk . For more information, please visit
www.d9infrastructure.com .
Important Notices
Goldman Sachs International, which is authorised by the PRA and
regulated by the FCA and the PRA in the United Kingdom, is acting
exclusively for D9 and no one else in connection with the matters
referred to in this announcement and will not be responsible to
anyone other than D9 for providing the protections afforded to
clients of Goldman Sachs International, or for providing advice in
relation to the matters referred to in this announcement.
[i] The Company is presenting EBITDA excluding Infrastructure as
a Service ("IaaS") revenue at the data centre
level for Verne Global, which passes through the profit and loss
statement as a cost after EBITDA.
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END
DISBLBDBRXDDGXR
(END) Dow Jones Newswires
November 27, 2023 11:40 ET (16:40 GMT)
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