PSE gives green light to Converge IPO

CEBU, Philippines —  Converge Information and Communications Technology Solutions, Inc. (Converge ICT), moves forward with its initial public offering after earning the nod of the Philippine Stock Exchange and receiving the permit to sell from the Securities and Exchange Commission.

Converge ICT will be offering up to 1.731 billion primary, secondary and overallotment option shares.

In accordance with consultations with its underwriters, Converge ICT has priced its IPO at P16.80 per share, which was determined considering the company’s ability to generate and grow earnings, short and long-term prospects, demand from investors, and overall market conditions.

“We appreciate the support from the regulatory bodies for our bid to go public. This is truly an exciting time for Converge ICT as the fixed broadband market in the Philippines is currently at an inflection point and is expected to grow at an accelerated pace. With our expertise, products, and strong value proposition, we aim to provide reliable and affordable internet to more Filipinos nationwide,” said Dennis Anthony H. Uy, Founder, and CEO of Converge ICT, in a statement.

Currently, Converge ICT owns and operates an end-to-end proprietary fiber network spanning over 35,000 kilometers in length, reaching approximately 4.1 million homes in over 200 cities and municipalities across Luzon.

As of June 30, 2020, its extensive infrastructure enables the delivery of high-speed, reliable, and affordable internet service to over 731,500 residential subscribers, more than 3,000 large enterprises and corporates, as well as almost 7,500 SMEs.

According to independent market research firm Media Partners Asia (MPA), Converge ICT is the fastest-growing fixed broadband operator in the Philippines, having captured 56.6 percent market share of new residential subscriptions since 2018.

In recent years, Converge ICT has delivered industry-leading revenue growth with a CAGR of 69 percent between 2016 and 2019.

In the first half of 2020, Converge ICT achieved revenues amounting to P6.490 billion, recording a 65 percent growth compared to the same period last year.

Warburg Pincus, a leading global private equity firm, has been the largest and most important investor and partner to Converge ICT.

Uy pointed out that the partnership with Warburg Pincus played a critical role in their growth.

“Working with them has enabled us to leverage their experience, network, and resources. We thank them for supporting our goal of giving Filipinos a premium internet experience,” he added.

“As the single largest institutional investor of Converge, we are proud to be partnering with the company’s talented founders and management team to build the largest high-speed fixed broadband operator in the Philippines. We strongly believe that Converge ICT is well-positioned to further capture the tremendous market opportunity and we look forward to continue to be an important part of its exciting growth journey in the future,” said Warburg Pincus Managing Director Saurabh Agarwal.

Converge ICT continues to enhance its capabilities to serve market needs and sets out to expand its distribution and last-mile networks to deepen its penetration in existing coverage areas as well as new markets in Visayas and Mindanao.

For the IPO, Converge ICT engaged Morgan Stanley Asia (Singapore) Pte. and UBS AG Singapore Branch as the joint global coordinators and joint bookrunners; BPI Capital Corporation as the sole local coordinator, joint local underwriter and joint bookrunner; BDO Capital & Investment Corporation as the joint local underwriter and joint bookrunner; as well as  BofA Securities and Credit Suisse (Singapore) Limited as international joint bookrunners.

Asia United Bank Corporation, First Metro Investment Corporation, Maybank ATR Kim Eng Capital Partners, Inc., PNB Capital and Investment Corporation and RCBC Capital Corporation are the local participating underwriters and China Bank Capital Corporation and SB Capital Investment Corporation are the local selling agents.  Other selling agents are the trading participants of the Philippine Stock Exchange.

The retail offer period for the IPO is from October 12 to 16, 2020 and the target listing date of the Company is October 26, 2020 under the ticker symbol, CNVRG.