Philippine Converge plans to sell part of the company to raise $1 billion

Converge ICT Solutions Inc. is considering selling a stake in its infrastructure platform to help the Philippine fiber provider raise cash for investment.

Converge, led by Dennis Anthony Uy, is in talks with potential advisors as it evaluates a deal that would bring a minority investor into its network platform. The deal will help raise about $1 billion depending on the final size and structure, as well as attract interest from other firms in the industry and investment funds, according to people familiar with the matter.

Shares of Converge rose 4.3%, the biggest gain in more than two weeks, valuing the company at about $2.3 billion.

A recent statement said that the company offers fixed broadband services to individuals, businesses, and wholesale customers, with over 560 000 kilometers of fiber assets and a network of 13.5 million homes in the Philippines as of the end of June. It also has integrated data centers and network solutions in its offer. Private equity firm Warburg Pincus held a minority stake in Converge until early this year.

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Converge’s revenue growth could slow to 25-30% in 2022 from 69.2% last year as consumers return to schools and offices and inflation dampens demand.

The deal is now in the preliminary stages of appraisal, no final decisions have yet been made and Converge may still opt out.

Digital infrastructure stocks in Southeast Asia are attracting more and more investor interest. Globe Telecom Inc. in the Philippines last month sold two tower packages to a KKR & Co.-backed company and Stonepeak joint venture for about $1.3 billion. In Malaysia, DigitalBridge Group Inc. and Equinix Inc. complete talks on data center business Time Dotcom Bhd.