Infratil Limited, a major infrastructure investment company, has announced its agreement to acquire Brookfield Asset Management Ltd's 49.95 percent stake in One New Zealand (One NZ). The acquisition, valued at NZD 1.8 billion, will increase Infratil's ownership in One NZ to 99.90 percent. The deal aims to strengthen Infratil's position in the digital services and connectivity sector in New Zealand.
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Funding the Acquisition
The acquisition will be funded through a combination of NZD 850 million equity raising, cash reserves, and debt facilities. This move reflects Infratil's confidence in the growth potential of One NZ, driven by data and connectivity tailwinds. The company expects further upside through ongoing simplification initiatives and a renewed focus on long-term value creation.
Growth Potential
One NZ, a digital services and connectivity company in New Zealand, boasts an extensive network with 2.7 million connections and population coverage exceeding 98 percent of the country. Infratil says since its initial acquisition in 2019, One NZ has experienced a significant transformation and achieved a strong market position in the mobile sector, with growth across multiple segments.
According to Infratil, full control over One NZ will provide greater flexibility in the business plan and capital allocation, enabling long-term value creation.
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Strategic Benefits
The acquisition is expected to have a positive impact on Infratil's cash generative core, ensuring stable and growing cash flows to support further development platforms. As a result, Infratil has increased its FY2024 Proportionate EBITDAF guidance range to NZD 800 million - NZD 840 million, reflecting the enhanced contribution from One NZ.
Financial Impact
According to the statement, to finance the acquisition, Infratil plans to conduct a NZD 750 million underwritten placement at NZD 9.20 per new share. This represents an 8.9 percent discount to the last close price and a 7.9 percent discount to the 5-day Volume-Weighted Average Price (VWAP) of NZD 9.99.
Equity Raising
Additionally, a retail offer of NZD 100 million will be made available to existing shareholders, allowing them to participate in the equity raising on a pro-rata basis.
Following the equity raise and completion of the One NZ transaction, Infratil's wholly owned group gearing is projected to be 18.7 percent, with NZD 927.7 million of available liquidity.
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The acquisition is unconditional and is expected to be completed shortly after the receipt of the Placement proceeds.
Infratil's move to acquire a majority stake in One NZ signifies its commitment to capitalizing on the evolving digital landscape in New Zealand while ensuring long-term value for its shareholders. One NZ, the New Zealand company will be 100 percent locally owned and managed for the first time, with this transaction.
