(Adds details about post-deal earnings, funding)
By Swati Pandey
SYDNEY, March 13 (Reuters) - Australia’s TPG Telecom Ltd on Friday said it will buy domestic internet services provider iiNet for A$1.4 billion ($1.1 billion), in a deal that would boost its broadband business and expand its presence across the country.
The deal comes at a time when Australia is rolling out a fast national broadband network at a cost of at least A$30 billion.
TPG Telecom, which already holds a 6.25 percent stake in iiNet, will pay A$8.60 per iiNet share, a 26.3 percent premium on Thursday’s closing price. The all-cash deal will be funded by new debt, TPG said in a statement.
Post-deal, TPG Telecom expects combined revenues of A$2.3 billion and earnings before interest tax depreciation amortisation (EBITDA) of A$654 million.
For the year-ended July 31, TPG had revenues of A$970.9 million and EBITDA of A$363.65 million. It will release its interim results on March 24.
“The Board views this as a significant reward for shareholders,” iiNet Chairman Michael Smith said in a statement.
The combined entity will provide broadband services to over 1.7 million subscribers.
Macquarie Capital had advised TPG on the deal while Azure Capital was the advisor to iiNet.
Earlier this week, Australia’s anti-trust regulator said it plans to reject telecom giant Telstra Corp’s request to raise its charges to other operators using its soon-to-be obsolete copper network. ($1 = 1.2984 Australian dollars) (Editing by Robin Pomeroy and Chris Reese)