TPG Telecom opens Vision Network auction; Uniti, Vocus tipped to bid

Morrison & Co and Brookfield-backed Uniti Group is set to take on old sparring partner Vocus Group, now owned by Aware Super and Macquarie, and infrastructure funds in the battle for TPG Telecom’s Vision Network.

TPG’s Vision Network provides broadband access to about 400,000 Australian premises. Erin Jonasson

Street Talk understands interested parties were given access to the data room this week, kicking off what would be one of the last telecommunication infrastructure assets to be carved out.

First round bids are due in six weeks.

Suitors have already been given a taste of the up-for-grabs assets when Bank of America made its maiden six-point pitch in November.

Uniti shapes as an early contender to watch. The rationale in picking up rival Vision Network, which records about $100 million in annual revenue from its broadband networks, is sound, particularly when Uniti has deep-pocketed new owners and a fired-up management team.

Uniti’s investors - Brookfield, Morrison and Commonwealth Superannuation Corp - paid $3.8 billion on an enterprise valuation basis to get into the sector last year, and shouldn’t be hard-pressed to find a bit extra should the bolt-on deal prove compelling.

Bankers have been keen to get close to Uniti’s management team, led by CEO Michael Simmons, who showed last year they were happy to stitch up meaningful deals without expensive financial advisers.

It’s understood Uniti is going down a similar path at Vision Network, leaning on its internal team to assess the asset and talking to bankers about funding options or bidding strategy only.

Sources said Barrenjoey had been cosying up to Uniti, but was yet to be formally hired.

Vision Network was pitched as Australia’s largest non-NBN residential wholesale infrastructure access network, with a footprint passing 410,000 premises and 135,000 active subscribers.

Early expectations are of a 50 per cent EBITDA margin and a $1 billion price marker. However, bidders are likely to weigh Vision Network’s NBN overbuild and its predominately copper/HFC (optical fibre and coaxial cable hybrid) versus fibre-to-premise network in sizing their bids.

Vocus is expected to also take an IM, while superannuation funds and infrastructure investors that have flooded Australia’s telco infrastructure in the past three years will also take a look.

For TPG, the Vision Network sale comes after it sold its mobile tower and rooftop infrastructure network to Canadian pension fund OMERS for almost $950 million in May, 2022.

Really- DYOR