Globe Telecom Inc. said Monday it signed an agreement with ST Telemedia Global Data Centres and Ayala Corp. for the development and construction of data centers in the Philippines.
Both STT GDC and AC will subscribe to new shares in KarmanEdge Inc., a 100-percent owned subsidiary of Globe that will house the carved-out data center business.
The capital infusion by the new partners will result in a post-money valuation in the range of $350 million.
Post execution of the share subscription agreement, Globe will remain the largest shareholder with a 50-percent ownership, followed by STT GDC with 40 percent and AC taking up the balance.
Globe will receive proceeds of $100 million from the transaction, with the remaining capital injected to be utilized by the business for future expansion and growth.
Globe said on top of the potential of the venture, it also unlocked and realized the value of its data center business, which now more closely reflects its true market value.
It said with the execution of the transaction, Globe will recognize a pre-tax gain of around P10.5 billion, coming from the partial monetization of its data center business coupled with the revaluation of the carrying value of Globe’s retained interest.
“We are excited about the future of Globe in the data center space. With Globe’s deep understanding of its customers, STT GDC’s technical expertise and Ayala’s compelling business reach, this venture is poised to be a significant player in this space for years to come,” Globe president and chief executive Ernest Cu said.
“Further, the transaction not only shows Globe’s commitment to delivering value to its shareholders but also proves our ability to generate and unlock value, especially within our core business,” he said.
Globe said the transaction is fully aligned with its view of the value and significant opportunity of the data center space in the Philippines, given the market demand and the country’s strategic location.
It also reinforces Globe’s transformation into a leading digital solutions group that provides connectivity and solutions to power and enable a robust digital ecosystem for the Filipino, the company said.
