MIRA makes $2.6b bid for Australia's Vocus

MIRA is willing to pay A$5.50 per share for 100% of the Sydney-listed company, according to a filing. The stock jumped 15% following confirmation of the offer and was trading at A$4.96 as of mid-afternoon February 8, giving Vocus a market capitalization of almost A$3.1 billion.

EQT proposed to acquire the company at a valuation of A$3.3 billion in May 2019 and terminated the offer less than two weeks later without elaborating on its rationale. This coincided with an expression of interest from local power provider AGL Energy, which was withdrawn due to a lack of agreement on due diligence terms.

KKR and Affinity Equity Partners made separate bids at a valuation of about A$2.2 billion in July 2017 and both pulled out a month later noting only that they were unable to support a transaction on terms acceptable to the Vocus board. This followed the disclosure of a non-cash impairment of A$1.5 billion for the 2017 financial year.

Interest in Vocus has grown with plans to meet rising data consumption needs. The company claims to be Australia's second-largest intercity network services provider with 30,000 kilometers of terrestrial cable Australia and New Zealand supported by 4,700 kilometers of submarine cable connecting with Singapore, Indonesia and offshore oil and gas facilities.

The company connects more than 5,000 buildings nationwide and provides near-connectivity to another 20,000 buildings. Its client base includes 5,000 organizations, including more than 200 government agencies. There are several branded services across Australia and New Zealand focused on individual consumers and small businesses in the retail sector.

Recent developments include an agreement to establish fiber network connections across all sites of Heritage Bank, the largest mutual bank in Australia with branch offices in seven metro areas across Queensland and New South Wales. There are also plans for a local IPO of the company's New Zealand unit in 2021 and the rollout of 5G services during the next few years.

Revenue was down 6% at A$1.8 billion for the 2020 financial year, largely due to declining performance in legacy areas such as copper wire and traditional voice connections. Vocus posted a loss of A$178 million compared to a profit of A$34 million the prior year. This has been attributed to a goodwill impairment in the retail division.

MIRA was set up by Macquarie Group in the early 2000s to manage a range of specialized vehicles, including listed funds. It closed its second Asia-focused fund at the hard cap of $3.3 billion in 2018. Recent interest in data infrastructure includes participation in the acquisition of Australia-based and Asia-focused data center operator AirTrunk at a valuation of A$3 billion.

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• Topics
• Australasia
• Infrastructure
• Buyouts
• Australia
• Macquarie Group
• TMT