Digital 9 Infrastructure (LON: DGI9), an externally managed closed-end investment trust focused on digital infrastructure, today announced that it has completed the acquisition of Host Ireland (Leeson Telecom Limited), an enterprise broadband provider in Greater Dublin, which leverages fixed wireless access (FWA) technology, for total consideration of €60m ($65.5m USD).
For the year ended December 31, 2021, Host Ireland reported revenue of €8.4m and adjusted EBITDA of €5.7m, implying an adjusted EBITDA margin of 67%. Therefore, based on the €60m enterprise value ascribed to Host Ireland, Digital 9 is valuing the business at a 10.6x EV/EBITDA multiple.
Host Ireland – Overview
Host Ireland owns and operates a high-capacity licensed microwave-based fixed wireless access (FWA) network in Greater Dublin, Ireland with ~2.65k business connections. Through this network, the company operates as a wireless internet service provider (WISP), providing broadband services at symmetrical speeds of up to 2 gigabits per second (Gbps).
Host Ireland is an ISP for 1.6k SME and enterprise customers, including multinational corporations, government agencies, and technology companies. The company serves these customers under short-term agreements, with a weighted average contract length of only 2.2 years.
Under Digital 9 Infrastructure’s ownership, Host Ireland will accelerate its geographical expansion plans, bringing FWA into other Irish cities and internationally.
Host Ireland provides its enterprise customers in Ireland with lower cost and low-latency internet connectivity, across its microwave and fiber network. Additionally, the company provides ‘next day’ installation, whereas fiber can take up to 90 days to install.
At the same time, Host Ireland’s FWA connections are used by certain customers as a back-up network to ensure 24/7 connectivity.
Spectrum and Backhaul
Host Ireland utilizes high-frequency E-Band spectrum, which are licensed frequencies ranging from 70 GHz to 80 GHz, to operate its fixed wireless access (FWA) network. To transmit fixed wireless internet service between its network and customers, Host Ireland has deployed ~50 base stations throughout Greater Dublin.
Host Ireland’s transmission equipment often connects to fiber backhaul, which routes the company’s network traffic back to local internet points-of-presence (PoPs) in the Dublin market. These PoPs are frequently located in data centers, with Host noting that it has an existing relationship with Equinix. In terms of fiber backhaul, Host’s network partners include Aurora Telecom, BT Group, Cogent Communications, eircom, and Vodafone.
Digital 9 Infrastructure – Portfolio
Digital 9 Infrastructure’s acquisition of Host Ireland marks the firm’s first investment in the wireless sub-sector of digital infrastructure. To-date, Digital 9 Infrastructure has raised total equity of £845m ($1.1bn USD) and, beyond Host Ireland, has made the following 4 investments:
- Aqua Comms: owns and operates 12.5k miles (20.2k kilometers) of trans-Atlantic and regional subsea cables
- EMIC-1: 6.2k mile (10k kilometer) subsea cable and terrestrial fiber system, known as Europe Middle-East India Connect 1, in-partnership with the 2Africa PEARLS system being developed by Facebook (Meta)
- Verne Global: data center operator in Iceland operating a 24-megawatt campus near the town of Keflavik, which is scaling to 40 megawatts through a development project
- SeaEdge UK1: 10.6-megawatt data center and landing station located in Newcastle, England, which connects with the North Sea Connect and NO-UK subsea cables
TETRA Ireland – Terminated Acquisition
In January 2022, Digital 9 Infrastructure agreed to make a €76m majority stake purchase in TETRA Ireland, an operator of public safety wireless networks across the Republic of Ireland. However, by February 2022, Digital 9 disclosed that Motorola Solutions, an existing minority shareholder of TETRA, had exercised its pre-emption right to acquire the majority stake in TETRA, ahead of Digital 9. As such, Digital 9 terminated its agreement to acquire a majority stake in TETRA.