Equity Analysis /
Thailand

Advanced Info Service PCL: Value accretion from TTTBB acquisition

  • Acquisition of a 99.9% stake in TTTBB and a 19% stake in JASIF

  • Full impact of synergies to be realized starting year three

  • Value accretion of Bt1-4/share to ADVANC from TTTBB acquisition

Bualuang Securities
5 July 2022

We regard ADVANC’s acquisition of TTTBB and JASIF as value accretive, to be led by the inorganic fixed broadband (FBB) growth, the FBB industry consolidation of major players and the long-term synergies of revenue increment and cost reduction. With its proposed amendments to JASIF’s main lease agreements, we see scope for a cost reduction starting 2032. It is our sectoral pick, based on its improved 2H22 core profit and attractive valuation—EV/EBITDA of 7.4x vs its recent high of 9.1x in Aug 2019.

Acquisition of a 99.9% stake in TTTBB and a 19% stake in JASIF

On Jul 3, ADVANC’s board approved Advanced Wireless Network Co., Ltd (AWN), its wholly owned subsidiary, to acquire (1) Triple T Broadband Plc (TTTBB) with total of 7.53bn shares (or 99.87% of total paid-up shares) from Acumen Co., Ltd (ACU), a subsidiary of JAS at the total value of Bt19,500m and (2) JASIF with a total of 1.52bn units (or 19% of all units at the price of Bt8.50/unit with the total value of Bt12,920m). It requires: 1) the shareholders’ approval from JAS’ shareholders to sell stakes in TTTBB and JASIF, 2) JASIF’s unitholders to amend terms and conditions of relevant agreements and 3) the NBTC’s approval before signing the share purchase agreement and executing the transaction. The transaction is funded by a loan and will be completed within 1Q23.