Australia’s Vocus opens its books to KKR

KKR offered in June to pay A$3.50 per share for Vocus, representing a premium to the previous closing price of A$2.86. The price has risen substantially since the offer: as of midday July 5, the stock was trading around A$3.40.

In a statement, Vocus’ board stressed that granting due diligence does not guarantee that an acceptable offer will result, what the terms of such an offer would be, or whether the board would recommend acceptance. Any deal will require clearance from Australia’s Foreign Investment Review Board.

Vocus was founded in 2008 and operates a fiber network that connects all the capital cities and most regional cities across Australia and New Zealand, including more than 5,500 buildings. The Australasian infrastructure is further connected to the US, Singapore, and Hong Kong. Customers include corporate, small business, government, and residential users.

Net profit for the 12 months ended February 2016 increased 223% year-on-year to A$64 million, while revenue rose 455% to A$831 million. The company attributed the performance to rising demand from corporate customers, as well as the acquisitions of competitors Amcom and M2 Group. However, these acquisitions have also contributed to a much weightier debt load.

KKR is currently investing its third pan-Asian fund, which closed in June at $9.3 billion, the largest pool of PE capital ever raised for deployment on a pan-Asian basis. The firm made its offer for Vocus days after closing the fund, and since has agreed to buy restaurant operator Dixon Hospitality.

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• Topics
• Australasia
• Buyouts
• Technology
• Australia
• KKR
• TMT