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Fibre-to-the-Premises (FTTP) network operator OptiComm (ASX: OPC) is set to be acquired by Adelaide-based telco Uniti Group (ASX: UWL) for $532 million, if sufficient funds can be raised.
Announced today, Uniti has entered into a scheme implementation deed with OptiComm under which Uniti will acquire 100 per cent of OptiComm's shares on issue.
The acquisition consideration consists of $407 million in cash and scrip consideration of approximately 84 million Uniti Shares implying total consideration of approximately $532 million, assuming $125 million for the value of the scrip component.
Uniti will fund the acquisition via a $270 million fully underwritten accelerated non-renounceable entitlement offer and a new $150 million debt facility.
Co-founded in 2005 by Paul Cross and David Redfern OptiComm is one of Australia's largest open access, FTTP wholesale network infrastructure operators.
The Melbourne-based company listed on the ASX in 2019, and has a market capitalisation of around $522 million.
Post-acquisition each OptiComm shareholder will also receive a $0.10 per OptiComm share fully franked special dividend payable by OptiComm subject to director approval and conditional on the scheme becoming effective.
The directors of OptiComm have unanimously recommended that its shareholders vote in favour of the offer, considering the deal will net shareholders a 165 per cent total return for OptiComm shareholders since the company listed on 21 August, 2019.
"Uniti's proposal is highly compelling and fully recognises the intrinsic value of OptiComm," says OptiComm chairman Allan Brackin (pictured).
"The flexibility under the various Scheme Consideration alternatives allows OptiComm shareholders to fully or partially realise their investment for cash certainty, while the scrip component allows shareholders to maintain an exposure to a larger private fibre challenger and potentially benefit from rollover relief.
"On behalf of the Board, we are confident that as a result of the combination, OptiComm's innovative and focused service proposition will be enhanced to the benefit of developers, retailers, shareholders and other stakeholders."
According to Uniti, the acquisition will accelerate Uniti's entry into private infrastructure, specifically for the retirement living, community and commercial precinct market segments.
The company also hopes the acquisition of OptiComm will expand its fibre network products on offer and will give the company a high level of assured future organic earnings growth.
OptiComm currently has an existing contracted pipeline in excess of 150,000 lots in addition to more than 70,500 active premises.
Uniti chairman Graeme Barclay says the transaction will take the Uniti Group to the next level.
"The acquisition of OptiComm and the associated Entitlement Offer accelerates our strategy in private fibre infrastructure ownership and delivers the next phase of growth for Uniti shareholders," says Barclay.
"Shareholders are expected to benefit from significant value creation from this transformational transaction and from the combined scale and capabilities of a more diverse telecommunications infrastructure company with a large pipeline of long-term growth opportunities.
"The Uniti Board is confident that we are well placed to significantly grow the fibre footprint, and maximise the efficiencies of the combined business to drive long-term, sustainable shareholder value."
All shares offered under the entitlement offer will be issued at a price of $1.40 per new share, representing a 9.1 per cent discount to Uniti's last close price of $1.54 on 12 June.
Approximately 192.9 million new Uniti shares will be issued under the raise, and each new share will rank equally with existing Uniti shares.
Shares in OptiComm are up 4.98 per cent to $5.27 per share at 3:59PM AEST.
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