TPG is set to acquire iiNet for about $1.4 billion.
Under the proposed transaction TPG will acquire 100 per cent of the fully diluted share capital in iiNet that it does not already own (TPG currently own 6.25 per cent of iiNet) by the a scheme of arrangement.
iiNet shareholders will receive cash consideration of $8.60 per share.
The cash consideration of iiNet's fully diluted equity at approximately $1.4 billion.
The acquisition will be funded from new debt facilities.
Post transaction, TPG's pro forma leverage is expected to be about three times next debt.
iiNet chairman, Michael Smith, said the board viewed it as a significant reward for shareholders who have shown their faith in iiNet.
"The price of $1.4 billion is a very tangible measure of the value that the extraordinary people of iiNet have created through their innovation, brilliant service and capacity to add value."
TPG chief executive, David Teoh, said iiNet and TPG were highly complementary businesses in terms of geographic presence, market segments and corporate customers base.
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"The combined businesses will provide broadband services to more than 1.7 million subscribers and will be well positioned to deliver scale benefits in an NBN environment."
The transaction is expected to be immediately earnings accretive for shareholders.
iiNet shareholders will be given the opportunity to vote on the scheme at a meeting in June.