StarHub has unveiled plans to acquire a majority interest in the broadband business of MyRepublic in Singapore, taking a 50.1 per cent controlling stake in a transaction potentially rising to $162.8 million.
Terms of the deal will see StarHub Online - a wholly-owned subsidiary of StarHub - assuming majority ownership of a new entity under the banner of MyRepublic Broadband, which will provide broadband services for residential and enterprise customers.
StarHub’s total investment will be up to $162.8 million, with an initial consideration of $70.8 million for 50.1 per cent shares of MyRepublic Broadband and a deferred consideration of up to $92 million should future financial performance metrics be met.
In addition to equity, StarHub has agreed to refinance $74.2 million of debt for MyRepublic for a period of three years, on completion of the transaction. MyRepublic will retain the remaining 49.9 per cent and its senior management team -- led by co-founder and CEO Malcolm Rodrigues -- will continue to lead MyRepublic Broadband.
“We are delighted to partner MyRepublic to step up innovation and bring more value to more customers in Singapore,” said Nikhil Eapen, CEO of StarHub. “COVID-19 has shown just how important quality broadband services are to our society, and 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.”
MyRepublic Broadband currently holds six per cent share of Singapore’s broadband market with the proposed transaction designed to “consolidate and strengthen” StarHub’s local position, expanding presence to 40 per cent in the process.
Going forward, MyRepublic’s broadband customers will gain access to enhanced offerings from StarHub’s Consumer and Enterprise Business Groups, including products and services offering connectivity, over-the-top content and cloud gaming.
“StarHub’s investment and partnership with us validate the vision of digital transformation we set out to bring to the industry, in Singapore and beyond,” Rodrigues added. “Everything consumers and enterprises love about MyRepublic is about to get even bigger and better through the commercial and operational synergies from this partnership.
“More importantly, 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.”
Upon completion of the acquisition, MyRepublic Broadband will operate as a subsidiary of StarHub with the transaction expected to be finalised by December 2021.
The acquisition comes weeks after MyRepublic cited unauthorised access on a “third-party data storage platform” as the primary cause of a data breach impacting 79,388 mobile subscribers based in Singapore.
As reported by Channel Asia, the access took place on a platform used to store the personal data of mobile customers and to mitigate risk, the internet service provider activated its cyber incident response team -- which includes a team of external advisors from KPMG -- to "work closely" with internal IT and network teams to resolve the incident.
According to a company statement, unauthorised access to the data storage facility has since been secured and the incident has been "contained".
The breach -- which took place on 29 August and was revealed to the media on 10 September -- resulted in hackers potentially accessing identity verification documents related to customer applications for mobile services, impacting Singapore citizens, permanent residents and employment and dependent pass holders.
Exposed information included scanned copies of both sides of National Registration Identity Cards (NRIC) housing name, date of birth and home address details, in addition to proof of residential address documents -- such as scanned copies of a utility bill -- for affected foreigners.
According to the Singapore-based provider, there was no indication that the breach affected other personal data such as account or payment information, with no systems compromised and no operational impact on company services.