Cordiant Digit. Regulatory News (CORD)

19 October 2023

LEI: 213800T8RBBWZQ7FTF84

Cordiant Digital Infrastructure Limited

Completion of Speed Fibre Acquisition

Cordiant Digital Infrastructure Limited (the "Company" or "CORD"), an operationally focused specialist digital infrastructure investor, is pleased to announce the completion of the acquisition of Speed Fibre DAC ("Speed Fibre" or the "Group").

This acquisition is a further step in the Company's portfolio diversification by asset class and geography with its entry into wholesale and retail fibre services in Ireland.

Speed Fibre is a cash generative enterprise with a diversified base of blue-chip customers. The Group represents a leading data delivery platform in a market with significant ongoing demand growth and development potential, in particular in the data centre sector. Speed Fibre's network is at the heart of Ireland's digital framework. The country is among the most digitally enabled economies in the European Union, and the continuing buildout of digital technologies and network infrastructure is a cornerstone of the Irish Government's economic, social and environmental policies.

Speed Fibre has a strong ESG and sustainability focus, having recently been ranked #1 in Europe in the fibre networks sector with a GRESB score of 97/100, and is targeting net zero carbon emissions by 2040.

As previously announced, the equity consideration for the acquisition is ?97.2 million, based on a total enterprise value of ?190.5 million. The equity consideration will be funded by ?67.6 million in cash and ?29.6 million through a vendor loan note with an initial interest rate of 6% and a maturity of four years. Following the acquisition of Speed Fibre, CORD's portfolio would have aggregate pro forma annual revenues to 31 March 2023 of £266 million, with aggregate pro forma, normalised annual EBITDA of £124 million for the same period.

With the continuation of Speed Fibre's existing senior loan facility with its current lenders (maturing in 2029), CORD has pro forma aggregate net gearing of approximately 38%.

The transaction exemplifies the Company's disciplined approach to investment. CORD continues to be strongly capitalised after the acquisition of Speed Fibre. In addition, the dividend is covered 4.0x by earnings and 1.8x based on adjusted funds from operations.

Steven Marshall, Chairman of Digital Infrastructure at Cordiant Capital, commented:

"We are delighted to welcome Speed Fibre into CORD's portfolio, which is now further diversified by asset class and geography. Fibre remains an integral part of digital infrastructure, supporting economic growth and social connectivity. As we remain committed to our "Buy, Build, and Grow" model, the plan is to invest further in Speed Fibre's network and work closely with the Irish government and local partners to extend high-speed digital access. This will nurture domestic innovation and provide a thriving ecosystem for both multi nationals and homegrown tech companies to flourish."

Benn Mikula, Co-Head of Cordiant Digital and CEO of Cordiant Capital noted:

"Notwithstanding the continued pressure on the investment companies' sector of the London Stock Exchange, the Company remains focused on building shareholder value through the combination of increasing cash flow and NAV at its portfolio companies as well as disciplined capital allocation, including promising investments such as Speed Fibre."

Peter McCarthy, CEO of Speed Fibre, added:

"Cordiant Digital Infrastructure Limited is an ideal partner for Speed Fibre, bringing a combination of capital support and expertise to drive the business forward. In this industry, having an investor with a long-term perspective is key and, as a team, it gives us the comfort to be able to invest to support our future growth." 

Analyst Call

The Investment Manager will host a remote presentation for analysts at 11.00 a.m. BST today. For those wishing to log in to the analyst call, please contact Ali AlQahtani at Celicourt via CDI@celicourt.uk.

For further information, please visit www.cordiantdigitaltrust.com or contact:

About CORD

Cordiant Digital Infrastructure Limited primarily invests in the core infrastructure of the digital economy - data centres, fibre-optic networks and telecommunication and broadcast towers in Europe and North America. Further details about the Company can be found on its website at www.cordiantdigitaltrust.com.

In total, the Company has successfully raised £795 million in equity, along with a further ?200m through a Eurobond with four European institutions; deploying the proceeds into four acquisitions: CRA; Hudson Interxchange; Emitel and Speed Fibre Group, which together offer stable, often index-linked income, and the opportunity for growth, in line with the Company's Buy, Build & Grow model.

About the Investment Manager

Cordiant Capital Inc. (the Investment Manager), the Company's investment manager, is a sector-specialist investor with particular expertise and experience in digital infrastructure. It invests in global infrastructure and real assets, running infrastructure private equity and infrastructure private credit strategies through limited partnership funds and managed accounts. Its current client base consists of global insurance companies, pension plans and family offices.

About Speed Fibre Group

Speed Fibre, Ireland's leading open access fibre infrastructure provider, includes Enet and Magnet Plus. Further details about Speed Fibre can be found on its website at www.speedfibregroup.ie

Enet is the manager of Ireland's 88 metropolitan area networks (MANs) - fibre rings that connect 94 large regional towns to high-speed international networks. Aside from managing the MANs, under a government concession, Enet has a managed services contract for Irish Rail's long-distance fibre backhaul network. It also owns key infrastructure such as the T5 ring which circles the M50 and connects many of the country's biggest data centres. In total, Enet manages or owns 5,400km of fibre. The concession to run the MANs lasts until March 2030.

Magnet Plus operates the country's largest independent connectivity network. It provides connectivity for some of the world's biggest technology companies, as well as telecommunications, data connectivity, and security services to both commercial and residential markets in Ireland, throughout Europe, the US and beyond.