Infratil Makes an Investment in Console Connect
Posted on 07/10/2023
Console Connect is a platform for the software-defined interconnection of applications and infrastructures. Infratil Limited executed a conditional agreement with HKT Trust and HKT Limited (HKT) (SEHK:6823), a telecommunications company in Hong Kong, to establish a strategic partnership to accelerate the growth of its Console Connect business. Console Connect is a top-3 global software-defined interconnection platform offering next-generation automated connectivity solutions. The Console Connect platform makes connecting to data centers, partners, clouds, and other applications simple and secure, with fully automated switching and routing. Console Connect owns its global IP network which has been developed over many years, serving around 17% of all internet traffic and reaching over 150 countries.
Infratil will initially acquire an 80% stake in Console Connect from HKT for US$ 160 million. Infratil will also enter into a strategic partnership with HKT, with both jointly investing up to US$ 295 million over a 2-year period following completion of the acquisition to accelerate Console Connect’s growth through: joint sales and marketing via an HKT-supported approach to offer critical fibre infrastructure and IP access to its existing and new enterprise & wholesale customers. There is also planned investment in new subsea cable systems and network development to increase Console Connect’s network capacity, resiliency, and reach.
Following this initial period of growth investment, Infratil will own between 60% to 80% of Console Connect, with HKT holding the remainder. Ultimate ownership stakes will reflect the relative equity contributions of each party over this initial 2-year period. As the majority investor, Infratil will have governance rights consistent with its interest and, working alongside HKT, will continue to drive the development and growth of the business.
Completion of the acquisition is conditional on telecommunication, foreign investment regulatory approvals and merger approvals in Australia, France, Germany, Greece, Hong Kong, Italy, Japan, Mozambique, the Netherlands, Singapore, South Africa, and the USA. Assuming those approvals are granted, completion is currently expected by Q3 2024.
Bank Street acted as exclusive financial advisor and Herbert Smith Freehills acted as legal counsel to Infratil. Moelis acted as exclusive financial advisor and Gibson Dunn acted as legal counsel to HKT.