Europe News

Headlines: three Cellnex acquisitions, three prospective tower IPOs…

Austria: América Móvil reduces stake in Telekom Austria

América Móvil will sell a 7.8% stake in Telekom Austria, reducing its stake from 59.70% to 51.89%. The move increases Telekom Austria’s free float to 20%. The State remains a 28.4% stakeholder.

France: Cellnex agrees to acquire 230 towers from Bouygues Telecom

In a relatively small but strategically significant deal, the largest pan-European towerco has agreed to spend €80mn acquiring 230 towers from Bouygues Telecom. Cellnex has disclosed a valuation of 13.8x adjusted EV/EBITDA multiple.

The portfolio represents less than 1% of France’s ground based towers, but heralds Cellnex’s entrance into the French market, inaugurating a long term partnership with Bouygues. A further tranche of 270 additional Bouygues towers may follow. For further details, see an exclusive interview with Cellnex’s France Country Manager Gaëtan Le Bouedec later in this edition.

France: Teasers out for the sale of €1bn FPS Towers

JP Morgan have put out teasers for the €1bn sale of FPS Towers, whose portfolio includes 2,482 towers, 159 rooftops, plus access to 20,000 further rooftop sites via their acquisition of LOXEL. TDF and Cellnex are likely bidders.

FPS was founded in 2012 when Antin Infrastructure agreed the acquisition of 2,166 towers from Bouygues Telecom for €185mn. For a detailed analysis of the French tower market, explaining why the FPS Towers portfolio is pivotal, read TowerXchange’s analysis later in this Journal.

France: TDF acquires ITAS TIM and their ~420 towers

France’s leading towerco TDF has consolidated their leadership of the broadcast tower market with the acquisition of ITAS TIM. Unconfirmed reports suggested the deal was valued at €100mn. A small proportion of ITAS TIM’s €45mn revenues were derived from telecom clients.

France: Orange and Free Mobile (Iliad) to phase out roaming from January 2017

Innovative and disruptive new market entrant Free Mobile, backed by Iliad, had accelerated time to market in France with a roaming agreement on the country’s largest network, owned by Orange. That roaming deal had been due to end in 2020, but will now be phased out from January 2017, leaving Free Mobile to seek alternate coverage options which may include increased co-locations. ARCEP had instigated the roaming deal at the outset but now appears to recognise Free Mobile as sufficiently established to build their own network.

France: Equistone agrees to acquire Camusat

Mid-cap private equity investor Equistone Partners has agreed to acquire a majority stake in Camusat following the exit of MBO Partenaires, a minority shareholder alongside management since 2011. CEO Richard Thomas, Eric Braghini, and several other members of the management team will reinvest in the Group as part of this transaction.

Camusat will be familiar to TowerXchange community members as regular exhibitors at our African, Asian and CALA events; Camusat designs, installs, monitors and maintains towers, and recently launched the modular e.power solution. Camusat employs more than 2,000 people in 35 countries across in Africa, South Asia, the Middle East and the Caribbean, and generated almost €175m of net sales in 2015.

Germany: Deutsche Telekom sale of Deutsche Funkturm and 27,000 sites imminent

Teasers are expected to be circulated after Summer for the €4-5bn sale of Deutsche Telekom’s towerco. Deutsche Funkturm owns 27,000 sites, of which around 8,000 are ground based towers with the rest rooftops. According to RBC research, the portfolio represents 39% of the sites in the 69,985 site German market.

Goldman Sachs and Morgan Stanley have reportedly been appointed to organise the auction, which may lead to a 100% sale or partial equity sale. Deutsche Telekom may yet IPO or retain the business, depending on interest.

Italy: New TIM management team may decide to retain INWIT

The prospective sale of TIM’s retained 60% stake in 11,200 tower INWIT has stalled. New CEO Flavio Cattaneo, appointed in March 2016, has re-evaluated the prospective sale of INWIT to be better prepared to deploy 5G, emphasising that the operator “doesn’t have a liquidity problem” to compel them to monetise INWIT.

EI Towers and Cellnex had been rumored to be in pole position to acquire INWIT, prompting Cellnex CEO Tobías Martinez to emphasise that their March 2016 offer had expired, urging TIM to make up their mind lest Cellnex deploy capital elsewhere – a process they have started with acquisitions in The Netherlands and France.

Italy: Cellnex acquires small cell operator CommsCon for €18.65mn

Cellnex has deepened their investments both in Italy and in small cells with the acquisition of CommsCon in a deal which valued the company at a 12.4x multiple. CommsCon operates 85 technical rooms hosting 720 base transceiver stations. These are connected to 12,200 small antennas deployed in DAS in stadia, underground networks, transport tunnels, city centres, offices, expo halls, airports and malls.

For further insight into this transaction, checkout the interview with Cellnex’s Alex Mestre here.

Italy: Proposed Hutchison, Wind merger could shake loose spectrum and towers

The entrance of a replacement fourth MNO to the Italian market could be facilitated if the proposed Hutchison-Wind consolidation results in the sale of spectrum and towers. Iliad are believed to be among the interested parties.

The Netherlands: Cellnex to acquire 261 towers from Protelindo for €109mn

Cellnex has agreed to acquire a portfolio representing a 9% market share of the 3,031 towers estimated to be in The Netherlands, at a EV/EBITDA valuation of 13.6x.

Indonesian tower giant Protelindo had originally acquired the towers primarily for tax reasons but, with a tax treaty now in place, took the opportunity to divest the assets with a 45% increase in valuation from the €7mn they deployed to originally acquire the towers.

You will find a detailed analysis of this transaction, including exclusive quotes from Cellnex CEO Tobías Martinez here.

Russia: VimpelCom and Tele2 tower sales progress

VimpleCom is completing the spin off of its tower assets into National Tower Company, with a view to divesting the business before the year end.

Meanwhile, Telecom Daily reports that Tele2 Russia is involved in talks with investors interested in acquiring it’s ~10,000 sites, seeking to raise around US$400mn.

Tele2 and VimpelCom are also believed to be engaged in talks to agree a network sharing partnership.

Spain: Cellnex post strong H12016 results

Cellnex’s adjusted EBITDA rose 17% from €115mn to €134mn between June 2015 and June 2016. Cellnex achieved significant organic growth, with total PoPs up 791 YOY. Tenancy ratios rose from 1.50 to 1.56 in the same period, with telecom site revenues up €54mn to €184mn and broadcast infrastructure revenue down €6mn.

Cellnex were inducted as members of Spain’s prestigious IBEX 35 index.

Spain: EI Towers closing in on Axion

Italy’s EI Towers is closing in on a deal to acquire Axion from current owners Antin Infrastructure. Axion operates 586 towers, 70% of which are in Andalucía. Axion’s core business comes from broadcast tenants, with some co-location by telecom clients. EI Towers currently operates 3,200 broadcast and telecom towers in Italy.

Spain: Brexit turbulence postpones Telxius IPO

Telefónica remain inclined to float tower and subsea cable business Telxius before the end of 2016 to reduce debt, maintain its credit rating, and raise capital for dividends. Morgan Stanley and UBS have reportedly been appointed to run the process. The MNO had carved out 16,233 towers from their opcos in Spain, Germany, Brazil, Peru and Chile into Telxius with a view to a July IPO, but market turbulence from Brexit forced a postponement. Meanwhile, TowerXchange are already starting to pick up the first signs that Telxius may be acquisitive beyond the balance sheet of it’s parent MNO.

The partial sale or IPO of UK subsidiary O2 remains an alternate option for Telefónica’s balance sheet restructuring, although the EU recently vetoed a merger with Hutchison.

Turkey: Turkcell IPO of Global Towers imminent

Turkish market leading MNO Turkcell is has confirmed intent to float its towerco subsidiary Global Towers, either on the Istanbul stock exchange or on an international market. Global Towers has 8,681 ground based towers and a total of over 23,000 points of service in its network, the majority of which are in Turkey with 1,186 sites located in the Ukraine.

UK: Arqiva refinancing may lead to IPO

Rothschild’s investigation of Arqiva’s options for balance sheet re-engineering could lead to an IPO, valuing the business at over GB£2bn. Arqiva has bank debts of around £700mn, plus billions in bonds. Arqiva’s origins are in television masts, but the company is increasingly focusing on telecom clients. Arqiva has 10,550 towers in the UK.

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