PE firms target SingTel’s Australian satellite unit
Singapore Telecommunications (SingTel) has put its Australian satellite unit up for sale, seeking at least A$2 billion ($1.9 billion), and a string of private equity firms and strategic investors are said to be chasing the asset.
KKR, The Carlyle Group, Providence Equity Partners and The Blackstone Group are all expected to bid, Reuters reported, with France's Eutelsat Communications among the strategic players to express an interest. According to Bloomberg, Bain Capital is also evaluating a possible bid.
The asset, Optus Satellite, provides television, radio, phone, data and military signals to Australia, New Zealand and parts of the Antarctic, and is scheduled to launch its sixth satellite this year. The unit serves more than two million households and companies, including the likes of Australian Broadcasting Corporation, News Corporation and the Australian Department of Defense.
SingTel bought Optus Satellite in 2001 as part of the acquisition of Optus, Australia's second-largest telephone services provider. It is now keen to divest the business and deploy the proceeds in fast-growing businesses in order to offset slowing sales in Australia and Singapore.
Credit Suisse and Morgan Stanley were reportedly hired by SingTel in March to consider sale options for Optus Satellite and they are willing to provide leveraged financing to the successful bidder at 7x Optus Satellite's EBITDA. The division posted an EBITDA for A$225 million for 2012.
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