PE-backed Converge ICT set for $680m Philippines IPO

The company plans to sell up to 1.73 billion shares for PHP19 apiece, which represents the bottom end of the indicative range, according to a filing. This equates to a market capitalization of PHP143 billion. The offering comprises 480.8 million new shares and 1.02 billion existing shares, as well as an overallotment option of 225.8 million shares.

Warburg Pincus and Converge’s parent company, Comclark Network & Technology Corporation, will both sell shares through the IPO. The private equity firm committed $225 million to Converge in October 2019 to support the company’s nationwide network expansion plans. This was its first major investment in the Philippines.

Founded by Dennis Anthony Uy, Converge claims to own the country’s fastest-growing fiber network with more than 731,000 residential subscribers as of June, up from 381,000 a year earlier. The network covers four million homes across 200 towns and cities.

Revenue came to PHP9.1 billion in 2019 while EBITDA reached PHP4.6 billion, local media reported, citing a prospectus.

“We believe that the Philippine fixed broadband market is currently at an inflection point, with Converge, in particular, serving as a catalyst for market growth as it continues to lead efforts to address current unserved demand,” Converge said, according to The Inquirer. It estimates that unserved broadband demand amounted to $4.2 billion in 2019, 4.3x overall industry revenue.

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• Topics
• Southeast Asia
• IPO
• Technology
• Philippines
• Warburg Pincus Asia