LONDON, UK: Cordiant Digital Infrastructure Limited has entered into an agreement to acquire the entire issued share capital of Speed Fibre DAC, Ireland’s leading open access fibre infrastructure provider.
Speed Fibre is being acquired from the Irish Infrastructure Fund for a total enterprise value of €190.5 million. The equity consideration of €97 million will be funded by €68 million in cash and €29 million through a vendor loan note with an initial interest rate of 6% and a maturity of four years.
On closing, Speed Fibre will be the fourth digital infrastructure platform acquired by the Company since its launch in 2021 and is consistent with its investment programme of buying strategic, cash flow generating platforms under its “Buy, Build & Grow” model.
The acquisition further diversifies CORD’s portfolio on a sub-sector and geographic basis. The Transaction is subject to customary regulatory approvals in Ireland and the United Kingdom and is expected to close later this year.
Speed Fibre operates 5,400 kilometres of owned and leased fibre and wireless backhaul across Ireland, on which it provides dark fibre, wavelength and ethernet services to a mix of carriers, internet service providers, corporate customers, and the government.
The business is also well-positioned to serve Ireland’s growing data centre sector, which is expected to be the fastest growing hyperscale data centre market in Western Europe over the next six years.
While primarily a backbone provider, Speed Fibre’s subsidiary, Magnet Plus, provides connection and service to approximately 10,000 business and retail customers in Ireland.
With a stable business model, sales growth and high revenue and cash flow visibility, Speed Fibre generated revenues of c. €80 million and EBITDA of c. €23 million in 2022. Outstanding gross debt of c. €111 million as at December 2022 and which matures in 2029 is provided by three bank lenders, all of whom have committed to continue to support Speed Fibre under the Company’s ownership. Gross debt was balanced by c. €19 million of cash on hand at year end 2022.
Speed Fibre has a strong ESG and sustainability focus, earning a 5-star rating from GRESB, an independent organisation providing validated ESG performance data, and is targeting net zero carbon emissions by 2040.
Shonaid Jemmett-Page, Chairman of Cordiant Digital Infrastructure Limited, said: “As a fourth significant investment, Speed Fibre represents a further strategic milestone for the Company. Speed Fibre operates in a new market for CORD where data consumption growth is expected to be among the highest in Europe. This provides additional portfolio cash flow supported by high visibility revenues from wholesale contracts with global blue-chip customers and offers the potential to generate long-term value and attractive returns to shareholders.”
Steven Marshall, Chairman of Digital Infrastructure at Cordiant Capital, added: “We are delighted to add another pillar to the Company’s portfolio. Speed Fibre is uniquely positioned as the leading independent national fibre and wireless backhaul operator and is poised to play an expanding role in Ireland’s digital economy. We expect to drive organic growth from existing customer traffic on its current network plus invest growth capex in new strategic fibre projects around Ireland and beyond.”
Benn Mikula, Co-CEO and Managing Partner at Cordiant Capital, added: “Speed Fibre is a further step in the growth and diversification of the Company’s portfolio. We are deploying capital into a key market in Western Europe’s evolving data economy. Moreover, Speed Fibre’s position as an important wholesale fibre and backhaul platform offers growth potential and complementarity with other digital infrastructure assets. The Transaction reinforces our ‘Buy, Build & Grow’ strategy.”