Eir to sell majority stake in Tetra Ireland in €76m deal

Eir has agreed to sell a majority stake in Tetra Ireland, a provider of secure communications to the Garda and emergency services, in a €76 million deal.

The buyer is Digital 9 Infrastructure, a newly-formed investment trust which last year acquired Aqua Comms, a Dublin-headquartered company that operates a sub-sea transatlantic fibre-optic cable that links the US to Europe via the Republic.

It is acquiring a 56 per cent stake in Tetra Ireland Communications Limited from Eir, and said it hopes to take full control of the company at a future date for a total consideration of up to €135.7 million. Such a move is, however, dependent on agreement from other shareholders Sigma Networks and Motorola.

Eir’s agreement to sell its stake to Digital 9 is contingent on a preemption clause that gives first refusal to the other shareholders. Sigma Networks and Motorola, which have a 25 per cent and 19 per cent stake respectively, have two weeks to decide on whether to agree to the sale.

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Digital 9 Infrastructure, which was only established last year, is overseen by Triple Point Investment Management, a London-based investment group that oversees more than £1.8 billion of assets.

The Tetra transaction is one of a number made by the trust over the past year. Its $215 million deal for Aqua Comms in March 2021 was the trust’s first and came shortly after it listed its shares as part of a £400 million flotation in London. Other assets owned by Digital 9 Infrastructure include a data centre operator in Iceland and a sub-sea cable landing station in England.

Overall Digital 9 Infrastructure has raised over £750 million since its initial public offering, with plans to raise a further £200 million via a new share placing by the end of this month.

Tetra was commissioned to develop a purpose-build standalone digital radio network for use by emergency services and non-commercial public bodies after winning a State-held competitive tender in 2006.

Approximately 97 per cent of Tetra’s customer base is comprised of public bodies – comprising around 70 agencies with some 24,000 active subscribers.

Network

Users of the network include An Garda Síochána, the National Ambulance Service, Dublin Fire Brigade, Irish Coast Guard, the National Parks and Wildlife Service, the Irish Prison Service, Eirgrid, the Irish Naval Service, Inland Fisheries Ireland, the Office of Public Works (OPW), Irish Water, and ESB Networks.

Tetra’s network provides a greater level of security, resilience and redundancy than services offered by commercial mobile operators. Tetra’s platform promises 98 per cent coverage, including offshore, mountainous regions and other remote locations, including for the State’s numerous islands.

The last publicly-available company accounts for Tetra show it paid dividends totalling €14 million to shareholders for the year ending June 2020. It recorded revenues of €37.7 million and pretax profits of €15.5 million for the 12 months.

The company successfully bid for a renewal of its contract in 2020 in a move that gave it a deal to provide its services for a further seven to nine years.