27th Nov 2023 18:20
(Alliance News) - Digital 9 Infrastructure PLC on Monday said it was launching a strategic review after announcing the sale of its stake in the Verne Group for up to USD575 million.
The disposal of the data group to funds managed by Ardian France SA comprises USD440 million in cash, split between USD415 million payable on closure of the deal and deferred consideration of USD25 million.
This will be topped up by a potential earn-out payment of up to USD135 million which is payable subject to Verne achieving run-rate earnings before interest, tax, depreciation and amortisation targets for the financial year ending December 2026.
Digital 9 intends to use some of the funds to pay down around GBP300 million of the revolving credit facility.
Pending receipt of the funds, Digital 9 said it would seek to secure a financing solution to fund Verne Global through to closing of the transaction, as well as developing a plan to address the group's "residual financial uncertainty."
The company said it had started a strategic review to develop a set of actions with a view to maximising shareholder value going forward.
It has come under pressure from activist shareholders to do so, but said to do this before the conclusion of the Verne sale could have undermined the process.
As part of the review, the board will review the management arrangements of the company's investment manager, Triple Point Investment Management LLP.
It also intends to review the skills and composition of the board to support D9 going forward. The board will appoint a leading recruitment consultant to conduct an independent external recruitment process to identify non-executive board director candidates with executive corporate finance and M&A credentials as well as other skills that may be required to support the outcomes of the review.
Shares in Digital 9 Infrastructure closed up 1.8% at 43.00 pence in London on Monday.
By Jeremy Cutler, Alliance News reporter
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