CIMIC exits Nextgen, sells stake to OTPP

CIMIC is offloading its 29 per cent stake in Nextgen to Ontario Teachers’ Pension Plan.

The crown jewel of Nextgen, led by David yuile, is the core data connectivity services business. Picture: Sam Mooy.

Construction firm CIMIC is getting out of Nextgen Group for good, with the company offloading its 29 per cent stake to Ontario Teachers’ Pension Plan (OTPP).

CIMIC, formerly known as Leighton Holdings, is hoping to net between $190 million to $210m from the sale as the company fully closes the book on its telecommunications assets.

The crown jewel of the overall Nextgen business is the core data connectivity services business - the North West Cable System, the Australia Singapore Cable Project – which has been sold to Vocus Communications for $807m.

With the Australian Competition and Consumer Commission (ACCC) yet to sign off on the deal, CIMIC is now divesting its interest in the last remaining asset, Metronode - the data centre business valued at around $500m. The other piece of the original Nextgen business, the cloud services business Infoplex, was picked up by Bulletproof in 2015.

CIMIC group executive chairman and chief executive officer Marcelino Fernández Verdes said: “The sale of our share in Nextgen Group enables us to realise the value built during our beneficial partnership with Ontario Teachers’.

“Our focus remains on the delivery of sustainable returns to all shareholders through our core businesses of construction, mining, mineral processing and public private partnerships.”

The divestment is subject to the completion of the Vocus deal and certain other conditions including approval from the Foreign Investment Review Board.

The Metronode business may have been passed over by Vocus but the current state of the data centre market could potentially see it make a move to list on the bourse or get picked up by the likes of global heavyweight Equinix.

With listed data centre operator NextDC showing healthy signs of growth and global players like Equinix investing in more internet real estate down-under to cope with growing demand. Metronode is likely to be an attractive target.

As for the networks business, its new owner Vocus is over the moon at the prospect of using the North West Cable System to connect its east coast and west coast assets.

Vocus chief executive Geoff Horth recently described the Nextgen Networks as the ‘holy grail’ for the telco, and once approved the acquisition will be its final piece of the puzzle as far as scale is concerned.