After months of speculation, Leighton Holdings has confirmed that the Ontario Teachers' Pension Plan will acquire 70 percent of Leighton's AU$885 million telecommunications companies Nextgen Networks, Metronode, and Infoplex.
The deal puts the investment firm's stake in the fibre network, datacentre, and IT services businesses at AU$619.5 million.
As part of the deal, the businesses will remain headquartered in Australia, with most of the existing management team remaining in place. Leighton Holdings' general manager of its telecommunications division will be appointed the CEO of the combined business, the company said.
"We will remain an Australian headquartered and managed business, and as we work towards separation from Leighton over the coming months, the management team and I will be using this opportunity to ensure that the business continues to be flexible, nimble, and focused toward our customers," McGrath said in a statement.
Ontario Teachers' Pension Plan's vice president of long-term equities Lee Sienna said that the purchase fit in well with the fund's existing portfolio.
"We are excited about moving ahead with Leighton. The businesses are a good fit with our portfolio and investment mandate," Sienna said. "Together they provide solid revenue streams and growth upside. We look forward to working with the existing management team to build on its strong track record."
The deal is expected to be finalised later this year, subject to the approval of the Australian Foreign Investment Review Board.