Globe forms $350M JV with Singaporean firm to “expand data center footprint”
The joint venture between Globe [GLO 2,576.00 0.39%], Ayala Corp [AC 859.50 0.06%], and ST Telemedia Global Data Centres (STT), a Singaporean company that markets itself as “one of the world’s fastest-growing data center providers”, will involved both AC and STT buying shares of KarmanEdge, which is a wholly-owned subsidiary of GLO, and which the parties to the joint venture will use as the dedicated legal entity for their data center business.
GLO will own 50% of KarmanEdge, with STT buying 40% and AC the remaining 10%.
The investment gives KarmanEdge a “post-money” valuation of $350 million. GLO will keep $100 million of the money paid by STT and AC, with the rest of the money going towards the development of KarmanEdge projects.
GLO said that the Philippines is an “underserved” data center market, and believes that the deal aligns with the “significant opportunity” in the data center industry.
MB BOTTOM-LINE
On the one hand, I love that GLO is out in the market taking investments for all of its side-projects like fintech (GCash) and data centers (KarmanEdge), as these investments help give hard valuations for GLO’s holdings that help shareholders and investors properly value GLO as an enterprise.
On the other hand, though, it feels to me like GLO is ripe to spin a few of these high-flying investments off, both to bring value to GLO shareholders, but also to allow us, retail investors, the chance to invest directly in a viable, top-tier fintech firm, or a data center-focused development company.
There’s definitely a market for startups and tech-focused investments, especially those that are managed within the Ayala Family’s sphere of influence.
To further illustrate the point, if you were interested in investing in GLO’s telecommunications business, which (traditionally) has been its main business and value proposition to investors, you’d need to spend over P2500/share, due in part to the value that has been built up in these massive side-projects.
You can’t really “just” invest in GLO’s network. One share buys the network, and random bits and pieces of all the other companies.
Sure, the same happens whenever you buy a share of any company that has subsidiaries, joint venture interests, and stakes in other firms, but I believe that shareholders are best served when the company has a relatively narrow interest; when a side-project blossoms into a something “real”, it’s a great time to spin that real thing off, raise some money, and further focus both the parent and the subsidiary in the process.
File this GLO issue under “good problems to have”.
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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