KKR Invests Big In OMS Group To Strengthen Subsea Telecoms In Southeast Asia!

It’s the age of wireless devices!

Many-a-devices are going digital by ditching their wires, while others are looking to get smart with IoT and ambient intelligence.

However, even wireless connectivity-providing Wi-Fi modems themselves are powered by wires. This is because wired cables provide speedy data exchange, especially when looking towards large data transfers across continents, which include cables that run across the seabed, connecting land-based stations.

Enter Optic Marine Services International Ltd. AKA OMS Group, which is a leading provider of integrated solutions for subsea telecommunications cable services, particularly in Southeast Asia.

Looking to benefit from the growing demand for connectivity in the region, comes an investment agreement between KKR (named after its founding members (Henry Kravis, Jerome Kohlberg and George Roberts) and the OMS Group. What’s the agreement about? Let’s explore!
 

What Does KKR’s Agreement With OMS Group Entail?

 

• American-based leading global investment firm KKR and OMS Group, a subsea cable service provider, have announced a definitive agreement which will see KKR invest $400 million in OMS Group. 

• The investment will help further the growth of OMS Group, which includes expanding its fleet size and capabilities in cable landing stations and subsea cable routes.

• The idea behind the investment is based on the growing demand of connectivity and the booming internet economy in Southeast Asia and “serve global fast-growing cross-border data transmission trends and the demand for comprehensive subsea cable services.”

• While no additional details are provided, the announcement mentions the transaction is set to be completed by Q1 of 2024 and is subject to customary closing conditions.

 

What Other Moves Has KKR Been Making?

 

• While KKR’s investment in OMS Group is part of its Asia infrastructure strategy, the company’s previous investments in digital infrastructure in Southeast Asia include the regional data center platform of Singtel (a communications technology group headquartered in Singapore) and Pinnacle Towers (a digital infrastructure platform with a strong focus on the Philippines).

• Of course, KKR has been active globally too, having invested $1 billion to Form Global Technical Realty, a build-to-suit data center platform (2020) as well as acquiring CyrusOne, a global leader in the development and operation of sustainable, scalable, high-availability and flexible data center solutions, with Global Infrastructure Partners (GIP) for $15 billion.

 

What Did Stakeholders Have To Say About The Investment?

 

• Projesh Banerjea, Director, Infrastructure at KKR, said, “OMS Group has established itself as a market leader with a longstanding track record of success and growth in Southeast Asia. As demand for greater connectivity across the region continues to grow, we are delighted to work closely with Datuk Lim, Mr Ronnie Lim, and the highly rated OMS Group team to meet this critical need.

• [Contd.] “Our tailored solution for OMS Group also creates strong adjacencies with KKR’s recent digital infrastructure investments and builds on long-term secular tailwinds in the region, including increased data consumption, enterprise cloud needs, a focus on digitalization by governments, and a booming digital economy. We look forward to sharing our global network and infrastructure expertise to take OMS Group to its next stage of growth.”

• Datuk Soon Foo Lim, the Chairman of OMS Group, said, “OMS Group and KKR share the same vision and appreciation of the critical data infrastructure OMS Group builds and maintain for its clients. We look forward to working with Mr David Luboff, Mr Projesh Banerjea and the world-class KKR team in advancing OMS Group’s growth plans.”

• Commenting on the investment, Ronnie Lim, Group CEO of OMS Group, said, “KKR’s investment in OMS Group underscores the value of OMS Group’s capabilities, which provides immense economic value to communities, corporations, and countries around the world by constructing and maintaining critical subsea data infrastructure. Together with KKR’s strong track record in supporting and investing in data infrastructure assets and its platform-building expertise, OMS Group is in a stronger position to support its clients to build and maintain greater global connectivity.”

Considering the rapidly growing demand for networking and the booming internet economy in Southeast Asia, do you think other networking technology companies will see similar investments? Will wireless technology be the next growth driver?

Let us know in the comments below!