Singapore-listed Keppel Infrastructure Trust (KIT) is to co-invest in UK-based subsea cable company Global Marine Group (GMG), which was acquired by the unlisted Keppel Infrastructure Fund (KIF) in March.
Real assets fund manager Keppel said KIT is investing US$90.6m (€83.7m) to hold a 46.7% equity stake in GMG, entering the deal at the same valuation as KIF.
KIF and an unnamed co-investor – which acquired all of GMG last month – will hold the remaining 53.3% equity stake.
Jopy Chiang, deputy CIO of Keppel and CIO for infrastructure, said: “KIF was able to act swiftly in the initial stages to secure 100% ownership of GMG, while incubating a stake in the platform for KIT.
“This transaction highlights Keppel’s prowess as a global asset manager, with an ecosystem of private funds and listed trusts reinforcing one another to seize strategic opportunities and deliver value to our different stakeholders.
“Our investment in GMG marked a rare and unique opportunity to acquire a world-leading provider of subsea cable maintenance and installation services with strong recurring cash flows. We also saw an opportunity for GMG’s complementary expertise to synergise and create value for Keppel’s wider connectivity ecosystem, including our subsea cable and data-centre projects.
“KIF was able to act swiftly in the initial stages to secure 100% ownership of GMG, while incubating a stake in the platform for KIT. By hunting as a pack, we are not only able to deliver strong returns to our limited partners but also offer KIT unitholders access to the fast-growing digital infrastructure space through this accretive investment.”
Kevin Neo, CEO of Keppel Infrastructure Fund Management, said the acquisition of the GMG stake was in line with KIT’s strategy to tap growth opportunities in digital infrastructure underpinned by rising global digitalisation.
“It will provide KIT’s unitholders with exposure to the growing subsea cable market, through an established platform specialised in critical support services for such infrastructure,” said Neo. “With a substantial proportion of GMG’s business secured by long-term contracts, this investment will generate long-term, stable cash flows for KIT.”
GMG operates a fleet of six vessels providing mission-critical maintenance and installation services for the global subsea fibre optic cable network. The operator has long-term contractual agreements with customers including telcos, hyperscalers and global equipment suppliers.
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