Bigblu to sell Quickline in bid to boost US firm's customer numbers
Bigblu Broadband (BBB), which provides alternative, ultra-fast broadband services, has conditionally agreed to sell its stake in Hessle-based Quickline Communications for up to £49m.
BBB is selling the firm to investment group, Northleaf Capital Partners, and said that partnering with Northleaf as a majority shareholder will allow Quickline to achieve its growth strategy.
Quickline is targeting over 500,000 premises with its 5G and Fibre to the Premise network in the coming years.
BBB said it will see a significant return on its original investment in Quickline, with proceeds providing balance sheet strength and an ongoing stake in a business targeting over 500,000 premises.
The disposal values BBB’s shareholding in Quickline at up to £48.6m, equivalent to approximately 84p per BBB ordinary share.
The consideration will include cash of up to £41.2m, of which £31.1m is payable on completion, with a further £10.1m as a deferred contingent consideration that is subject to certain performance conditions being met by March 2022, or in certain circumstances, May 2022.
A further £5.6m will come from loan notes on completion (with an option to convert partially into equity) and an additional award of loan notes (with an option to convert partially into equity) of up to £1.8m subject to the conditions of the deferred contingent consideration also being met.
Should these options be exercised, BBB would retain an 8 per cent stake in the ongoing business.
Upon completion, BBB’s remaining operations will consist of its Australasian operations (SkyMesh) and its Nordics business (Bigblu Norge AS).
The firm said the disposal represents an excellent return for shareholders of up to 5.8 times the cost of Bigblu’s investment, realising not only an immediate cash return but also a retained interest in the business going forward.
Andrew Walwyn, chief executive of Bigblu Broadband, said: “The management team has extensive experience in the sector and a track record of building attractive assets and delivering shareholder value.
“Through the sale of Quickline, BBB has once again demonstrated its ability to maximise the value of its interests in the high growth broadband connectivity market. This is now the second time that the Board has realised excellent returns for shareholders.
“BBB remains on a strong financial footing, enabling the Board to consider appropriate means of returning surplus cash to shareholders whilst also considering the opportunities within its continuing operations so as to ensure the continued future growth of shareholder value for BBB’s shareholders.”
