Denis O'Brien, one of Ireland's wealthiest businessmen, has taken full ownership of the Digicel mobile phone operation in the Caribbean in a deal that will see him receive $700-$800 million in cash.
Mr O'Brien has set up a Bermuda-based company called Digicel Group to acquire Digicel Limited, which owns the Caribbean mobile operation, in a $2.4 billion deal.
The deal values Mr O'Brien's 78 per cent stake in Digicel Limited at $1.87 billion. It is understood that he will reinvest about $1.1 billion in the new business, leaving him to receive the balance.
The remaining $1.4 billion being paid for Digicel Limited by the new company is being raised through debt from capital markets. This will be through the issue of corporate bonds, carrying a high interest rate. A roadshow to raise these funds will begin within a fortnight, according to Digicel. No comment was available from Mr O'Brien.
This deal only involves Digicel's operations in the Caribbean and excludes its mobile licences in the Pacific Islands. Digicel is one of the fastest-growing mobile operators in the world. It has about four million subscribers in 22 markets. It is thought to have added more than one million in the past 12 months.
This marks the second occasion that Mr O'Brien has banked a healthy profit from selling a mobile phone company. He founded Esat Telecom in Ireland in the 1990s before selling it to BT, earning €290 million in the process. Esat held Ireland's second mobile phone licence.
Mr O'Brien is not the only Irish executive to net a handsome financial windfall from the Digicel transaction. Digicel's other key shareholders include his father Denis snr; Leslie Buckley, a long-time senior associate of Mr O'Brien; Lucy Gaffney, a former Esat Telecom executive; accountant Greg Sparks, Digicel executive Séamus Lynch, and PJ Mara, a public relations consultant and former adviser to Charles Haughey.
They are expected to net between $5 million and $70 million each from the transaction.
Denis O'Brien and his associates invested about $150 million between them in Digicel when it was founded in April 2000. Other shareholders include Digicel's staff, who own about 10 per cent of the equity, and Blackstone Group, a private equity company thought to own 3 per cent of the equity.
As a result of the deal, Mr O'Brien has decided to abandon his plan to list the company on the stock market in an initial public offering. He has also shelved plans to launch Digicel in the US as a mobile virtual network operator.
