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A LANDMARK deal for JT to purchase Manx Telecom in a move which could pave the way for further expansion across the Crown Dependencies reinforces Jersey’s “commitment to digital leadership and economic resilience”, according to the Treasury Minister. The £500 million acquisition – backed by the infrastructure investment arm of Jersey-based private equity firm CVC Capital Partners – will create the largest full-service telecoms provider across Jersey, Guernsey and the Isle of Man. JT chief executive officer Daragh McDermott said that the purchase – which had been two years in the making and was confirmed on Friday afternoon – was the most significant event in the public-owned company’s 137-year history. Treasury Minister Elaine Millar, who represents the public as shareholder, said that the deal “strengthens” the position and growth plans of what she described as a “strategic national asset”, while also reinforcing the Island’s “commitment to digital leadership and economic resilience”. “We look forward to seeing this strategic partnership develop and are pleased to see JT’s ambition to secure scale and drive utilisation of the major network investments that it is making,” she added. The move will almost double the size of JT, which currently has around 500 staff. It also means that JT will compete with Sure in each of the three Crown Dependencies. Taxpayer-owned JT Group will run Manx Telecom and have a 45% stake in the business, with CVC owning the other 55%. “The JT and Manx Telecom teams share similar values and ambition, making the acquisition a perfect fit, and allowing us to accelerate our plans to secure further scale and growth of IoT [Internet of Things] and managed service lines of business, whilst continuing to serve our existing markets, with the same dedication and care that has become our hallmark,” said Mr McDermott. In CVC, JT is partnering with a business with a significant Jersey presence which has £200 billion in assets under management. More than 60% of the firm’s management fees are generated in Jersey. Mr McDermott said: “They are a big player, and Jersey is an important jurisdiction for them, which is one of the factors that unlocked this transaction. In terms of this transaction, CVC brings three things: capital, deep strategic market expertise, and other opportunities, both from their existing portfolio and elsewhere. “If this was just about the money, we could have gone to a bank; this is an important long-term strategic partnership with real legs for the future.” Explaining why the deal was the right thing to do, Mr McDermott said: “We will be the main provider in the Crown Dependencies, but we want to grow that because of the opportunities across that network. We will also be re-growing our IoT business, which is international, and building our UK managed services business. “At the moment, JT has a scale issue: we invest an awful lot of money in technology, but we can make more use of that. There are two ways of doing that: you can spread geographically, or you can get customers to start using more and more of it. “With this deal, we can make much greater use of our technology to extend it into the Isle of Man and use our infrastructure to run the networks there. “The intention is to create a Crown Dependency telecom fabric from which to grow business within the Crown Dependencies, but also drive traffic through it as well.” Unlike JT, Manx Telecom does not belong to the island’s government. Over recent decades, it has been owned by BT, Telefonica, private equity, and it has been listed. Its current owner is investment firm Basalt Infrastructure. With regards to JT’s operations in Guernsey, Mr McDermott said: “This increases our ability to expand there. We have missed out in the past because a lot of businesses operate in all three Crown Dependencies but this will create more opportunities in Guernsey as well as the Isle of Man.” Asked about what JT’s single shareholder – the government – thought of the deal, he said they had been “brilliantly supportive”. He said: “Although JT is an arms-length organisation, we’ve needed shareholder approval, as you’d expect for such a big transaction. The Treasury Minister has looked at it and engaged her own independent consultants to assess if this is in the best interests of Jersey. And they’ve agreed that it ticks all the boxes.” Mr McDermott added that the government was likely to benefit through an enhanced dividend, once the businesses had been fully integrated. “This is all about JT creating a strategic partnership with CVC to purchase Manx Telecom,” he stressed. “We are not looking to sell that business on in a few years’ time; we’re buying this for keeps, to make a single Crown Dependency fabric from which to grow business and make long-term investments.” Asked if there would be any redundancies, the JT CEO said: “The telecom world has always changed and it continues to change, and we would be changing with or without this transaction. There will be efficiencies but equally we’ll be growing the business as well.” Mr McDermott added that JT did not intend to change the brands. “Manx Telecom is a strong, well-recognised and valuable brand and there would be no benefit in changing that.” Although JT’s new business partner CVC has invested in a broad range of businesses, it is perhaps best known for its connection with sport. It previously owned a controlling interest in Formula One and currently has investments in the French and Spanish professional football leagues, Premiership Rugby, Six Nations, Women’s Tennis Association, and Volleyball World. Concerning the JT deal, Tom Goossens, Partner and Co-Head of the DIF Infrastructure fund strategy at CVC DIF, said: “Our investment in Manx Telecom Group reflects our conviction in the long-term value of resilient, locally rooted digital infrastructure. As the Isle of Man’s incumbent operator, Manx Telecom Group offers a strong platform for innovation and growth, and we are excited to support its next phase of development. “The partnership with JT Group further builds on this foundation, enabling us to scale operational capabilities across the Crown Dependencies and beyond. Together, we aim to accelerate investment in next-generation networks and deliver enhanced connectivity and enterprise services to customers.”
