Leighton Holdings has sold 70 per cent of its telco assets to the Ontario Teachers’ Pension Plan. The sale values 100 per cent of the businesses at $885 million.
The telco assets include Nextgen Networks, Metronode and Infoplex businesses.
Peter McGrath has been appointed as the CEO of the combined telecommunications business.
“We will remain an Australian headquartered and managed business and, as we work towards separation from Leighton over the coming months, the management team and I will be using this opportunity to ensure the business continues to be flexible, nimble and focused toward our customers,”McGrath said in a statement.
In February Leighton disclosed plans to sell the telco assets to Teachers’, subject to final negotiations, definitive documentation, due diligence and closing conditions such as the consent of various counter-parties.
As part of the plan, Leighton also agreed to an appropriate ownership structure through the joint venture, for Leighton’s interest in these businesses from closing. In a statement to the ASX, Leighton CEO, Hamish Tyrwhitt, said Teachers’ will provide enhanced financial strength and access to capital.
“We have developed an ownership structure that is well positioned to maximise the growth potential of these telecommunications businesses,” Tyrwhitt said.
It plans to continue to support the businesses through the provision of operations and maintenance services through its Visionstream entity.
“The sale price represents a compelling value creating proposition for Leighton’s shareholders. It has the potential to create further value given that we will retain approximately 30 per cent of the businesses and thereby access to the upside value created by the new ownership structure with Teachers’,” he said.
The transaction is expected to close mid-2013.