Telefonica has confirmed the sale of up to 40 percent of its infrastructure subsidiary Telxius to private equity firm KKR for EUR 1.275 billion. In a statement, the Spanish operator said the transaction implies an enterprise value for Telxius of EUR 3.678 billion, or 11.4 times its 2017 EBITDA, including debt. The agreement also includes a call option for 62 million Telxius shares – around 24.8 percent of the unit – for EUR 790.5 million as well as the option to acquire and sell an additional 38 million shares – around 15.2 percent of Telxius – for at least EUR 485 million.
The sale of the Telxius stake is subject to regulatory approval and comes around four months after Telefonica abandoned an IPO for the unit due to the unfavourable market situation. In September the company offered a 36.36 percent stake in the subsidiary in a bid to cut a debt level that stands at around EUR 50 billion. It then decided to cut its dividend and wait for a better window to divest assets.
Telxius was created just over a year ago and currently owns and operates a portfolio of nearly 16,000 telecommunications towers in five countries and manages an international network with approximately 65,000 kilometers of submarine fibre optic cables, including around 31,000 kilometers owned by Telxius.
