Latham Advises HKBN Ltd. in Acquisition of New World Telephone

Transformative transaction complements HKBN's enterprise solutions business.

April 01, 2016

HKBN Ltd. (“HKBN”; SEHK stock code: 1310) announced on 31 March 2016 that HKBN and its indirect wholly-owned subsidiary, HKBN Group Limited (“HKBNGL”), completed the acquisition of the telecommunications and online marketing solutions businesses (the “Target Business”) from New World Development Company Limited (SEHK stock code: 17) and its direct wholly-owned subsidiary, New World Telephone Holdings Limited (“NWTHL”). HKBNGL acquired the Target Business for a cash consideration of HK$650 million on a cash-free, debt-free basis (subject to adjustments), financed through a debt facility, with an additional cash rebate for services provided by HKBNGL and the Target Business to NWTHL and related parties based on 50% of settled invoices up to HK$50 million in aggregate. 

HKBN intends to complement its existing business with the acquired businesses from NWTHL. NWTHL’s fixed line and broadband telecoms business has a primary focus on the Enterprise Solutions (“ES”) market. This acquisition will allow HKBN to more than double its ES business while also expanding its customer base in medium-sized enterprises, allowing HKBN to accelerate its growth in the SME segment. In addition, the transaction will significantly increase the breadth and depth of HKBN’s reach by adding nearly 200 commercial buildings as well as provide additional route diversity for overlapping coverage buildings. 

Ni Quiaque Lai, Head of Talent Engagement, Chief Financial Officer and Executive Director of HKBN, commented, “On a transformative transaction such as this, which promises to increase the scale and scope of our customer base dramatically, we are glad we had the support and guidance of our trusted counsel Latham & Watkins.” 

Latham & Watkins’ Hong Kong corporate partner William Woo added “We are delighted to have brought together a team of corporate, finance and technology lawyers across Latham & Watkins’ Hong Kong and Singapore offices to address a range of complex issues and help HKBN achieve a great outcome.” 

Latham & Watkins advised HKBN on the transaction with a Hong Kong-based corporate deal team led by partners William Woo and Cathy Yeung and counsel Helena Kim with associates Angela Cheung and Bonnie Tse. Advice was also provided on finance matters by Hong Kong partner Howard Lam with associates Lucy Wu and Dolynn Yap and on technology transaction matters by Singapore partner Luke Grubb.

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