Digital 9 Infrastructure PLC (LSE:DGI9) has said that, further to its announcement on June 27, 2022, the company has completed the acquisition of a 51.76% economic stake in Arqiva Group Limited, a UK-based data, network and communications service provider.
In a statement, Phil Jordan, chair of Digital 9 Infrastructure, commented: "Arqiva provides D9 with access to highly resilient, long-term, and inflation-linked cash flows and further diversifies our portfolio into wireless networks. Together, D9 has built a portfolio of scalable platforms and technologies in digital infrastructure, the user demand for which will continue to grow through the economic cycle. D9 looks forward to supporting Arqiva in its next phase of growth, delivering its obligations as a national broadcasting service and helping enable its smart metering and connectivity solutions."
Arqiva is the leading UK provider of TV and radio broadcasting and benefits from a strong Internet of Things (IoT) platform. Between the original announcement and completion of the acquisition, Digital 9 Infrastructure noted that Arqiva has successfully refinanced a £625mln junior bond (due to mature in September 2023), using existing cash resources and a new £450mln term loan, repayment of which is due in March 2028.
This means, Digital 9 Infrastructure added, that Arqiva benefits from a stable capital structure with only 13% of Arqiva's debt needing to be refinanced in the next five years, all of which is BBB rated.
Following the investment in Arqiva, Digital 9 Infrastructure's underlying portfolio will have a weighted average contract length of 7.7 years, with 69% of revenues having some form of inflation protection and an aggregate EBITDA of £223mln.
Digital 9 Infrastructure is an investment trust that invests in the infrastructure of the internet that underpins the world's digital economy. The assets it invests in typically comprise scalable platforms and technologies including (but not limited to) subsea fibre, data centres, terrestrial fibre and wireless networks.
From its IPO in March 2021 and subsequent capital raises, the company has raised total equity of £905mln and a revolving credit facility of £375mln.