Malaysia's Axiata Group has arranged to sell a 34.1% stake in its wholly-owned telecommunications infrastructure services division edotco Group for $600 million.
The operator will place $400 million worth of primary shares with Innovation Network Corporation of Japan, and $200 million in secondary shares with Khazana Nasional Berhad.
The placement is expected to close by the end of January. It values edotco at close to $1.5 billion, with an enterprise value to FY16 ebitda multiple of 12.5x – roughly comparable to the company's regional peers.
The valuation takes into account the potential future injection of tower assets from Axiata's Cambodian and Sri Lankan operations, which would further increase Axiata's shareholding in edotco.
“Our lead investors and new shareholders, INCJ and Khazanah, are both long-term investors who will provide strategic value-add to edotco’s growth strategy, open doors to further strategic collaborations, as well as enhance and diversify our shareholder base,” edotco CEO Suresh Sidhu said.
Axiata CEO Jamaludin Ibrahim added that edotco achieved a comparatively strong valuation during the placement due to its robust recent business growth.
“We are determined to make edotco a world-class business and one of the world’s largest independent tower companies by 2020. The successful placement exercise is yet another step - financially and symbolically - towards facilitating this aspiration.”