Warburg-backed Converge ICT gets regulator nod for PH’s biggest IPO at $857m

FILE PHOTO: A trader walks past the electronic board of the Philippine Stock Exchange in Makati city, Metro Manila, Philippines June 27, 2016. REUTERS/Romeo Ranoco

The Philippine Stock Exchange (PSE) has given its approval for the initial public offering (IPO) of Converge ICT Solutions, a Warburg Pincus-backed fiber-optic broadband services provider in the country.

The approval paves the way for what can be the Philippines’ biggest IPO, with Converge offering 1.73 billion shares, including the overallotment option of as much as 225.79 million shares, at 24 pesos each for a total of 41.52 billion pesos ($856.97 million).

The company is set to release the final offer price on October 9 while the IPO is targeted to run from October 13 to 19, according to the prospectus released Thursday. The listing would be the Philippines’ largest IPO, overtaking Pilipinas Shell Petroleum Corp’s $380.79 million share sale in October 2016.

Converge intends to use the net proceeds from the primary offer primarily for capital expenditures requirements to accelerate its nationwide fiber network rollout and other general corporate purposes.

The exchange’s approval of the public offering and listing of the company’s shares is subject to its compliance with all of the post-approval conditions and requirements of the exchange, the PSE said in a notice.

While the coronavirus outbreak has affected most industries around the world, Converge ICT saw demand for fixed broadband in the Philippines accelerate with the onset of Covid-19. This, as work-from-home arrangements and social distancing, become the “new normal” in the country.

According to data cited by the company, an average household in the Philippines would require between 250 GB and 480 GB of data per month to function optimally under continuing work- and school-from-home arrangements.

In May 2020, Converge acquired approximately 50,000 new residential subscribers, the highest monthly gross additions on record, compared to monthly new residential subscriptions of approximately 33,000 in each of January and February 2020.

In June 2020, Converge added approximately 60,000 new residential subscribers, exceeding the May 2020 record by 20 per cent.

American private equity giant Warburg Pincus is a minority shareholder in the company, having invested $225 million in July 2019. Warburg Pincus has a long track record of investing in the technology, media, and telecommunications sector, with select marque investments including Bharti/Airtel, Inexio, Ziggo, and Crowdstrike.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.