Telstra has partnered with the Australian government to acquire Digicel Pacific, the mobile operator active in Papua New Guinea, Nauru, Samoa, Tonga and Vanuatu, and Fiji. Digicel Pacific has around 1,700 employees and 2.5 million subscribers, from retail customers through to large enterprises. The business generated EBITDA of USD 233 million for the financial year ended 31 March 2021, and an EBITDA margin of 54 percent.
Partnership with government
Telstra will contribute USD 270 million in equity, while the Australian government, through Export Finance Australia, will contribute USD 1.33 billion to the USD 1.6 billion purchase price. The government will also provide Telstra with strategic risk management support. Telstra will own 100 percent of the ordinary equity.
On completion of the deal, Digicel Pacific will be run as a separate business within Telstra’s International division, which will include maintaining separate P&L and IT systems. Telstra will also retain rights to use the same Digicel brand, and the Digicel Pacific management team will continue the day-to-day running of the business.
Digicel Group said the deal includes a potential three-year, USD 250 million earn-out. It expects to close the sale in Q1 2022, pending government and regulatory approvals. The divestment leaves the company's business focused on the Caribbean and Central America.
Digicel Pacific will keep the same management, and Digicel Group chairman Denis O'Brien will take a seat on the company's board.
