US owner Trilogy to receive around $930m from 2degrees sale
Fourth-quarter and full-year accounts filed by Trilogy International Partners reveal what it will get from the sale of 2degrees — whose latest financials were also reported yesterday.
The accounts say the Seattlebased, Toronto Stock Exchange-listed Trilogy “will receive approximately NZ$930 million in connection with the completion of the 2degrees sale”.
Trilogy owns 73 per cent of the Kiwi telco, with the balance held by Netherlands-based Tresbit. The total cash consideration of the 2degrees sale will be NZ$1.32 billion, the TSX filing says.
In July last year, Voyage Australia (a joint venture between a Macquarie Group fund and Aware Super) bought (then) ASX-listed Vocus Group.
Voyage, in turn, proposed a deal where it would buy 2degrees then merge it with Vocus Group’s New Zealand operation, which had rebranded as Orcon Group.
On March 15, the Commerce Commission approved the Orcon Group2degrees deal. It has also been approved by the GCSB.
The Overseas Investment Office has yet to deliver its verdict, and a spokeswoman told the Weekend Herald there was no set timeline for a decision.
Analysts are not expecting any push-back, however, given the OIO last year unconditionally approved Voyage’s purchase of Orcon.
2degrees’ latest financials were also revealed in Trilogy’s latest Toronto Stock Exchange filing overnight.
In what will probably be its final set of numbers under its longtime American owner, 2degrees made operating earnings and profit gains for both the fourth quarter and the full 12 months to December 31, 2021. (Trilogy reported the Orcon deal numbers in NZ$ and 2degrees’ accounts in US$).
2degrees’ fourth-quarter revenue rose 6 per cent from the year-ago US$131.3m to US$139.8m ($197.7m).
Its full year-revenue rose 15 per cent from the year-ago US$458.9m to US$528.6m.
Quarterly adjusted ebitda rose 9 per cent to US$32.4m, full-year adjusted ebitda was up 15 per cent to US$127.6m.
In mobile, 2degrees finished the year with post paid customers up 8 per cent to 552,000 and loweryielding prepay customers down 8 per cent to 890,000.
In fixed-broadband, 2degrees continued to grow quickly, albeit off a low base. Subscriber numbers increased by 13 per cent to 149,000.
That number is set to swell, assuming the Orcon Group merger is approved. Orcon has around 210,000 fixed-broadband customers across its Orcon, Slingshot, Flip and Stuff Fibre brands. Orcon also has around
40,000 mobile customers through a wholesale arrangement with Spark.
The merged operation will trade as
2degrees, and be headed by Orcon Group chief executive Mark Callandar. It is expected to have combined annual revenue of around $1.2b.
2degrees and Orcon shelved their respective IPO plans as merger talks were announced. The pair — who will trade indebted parents for the deeppocketed Voyage if the deal is approved — now say a listing is “off the table”.
Trilogy had two telcos in its stable: 2degrees plus Boliva’s NuevaTel, which has struggled amid a chaotic local economy and made more red ink in 2021, pushing Trilogy to an overall loss of US$28.5m versus its 2020 net loss of US$41m.
Trilogy this week announced the sale of NuevaTel, for an undisclosed sum, to a South American telco group.
Although Trilogy is selling 100 per cent of its stake in 2degrees, its founder and chairman John Stanton will retain a couple of ties with New Zealand. The telecommunications billionaire is still on the boards of CostCo and Microsoft.
CostCo is currently building its first store in New Zealand — an airport-size construction in Westgate, northwest Auckland. Microsoft is building its first data centre in NZ just a stone’s throw away.