Telia Company has announced an agreement for Brookfield’s core infrastructure fund and Alecta jointly to acquire 49 percent of its tower business in Finland and Norway. The total cash proceeds to Telia for the 49 percent stake is EUR 722 million and these will be retained to enable deleveraging. The transaction covers 4,700 towers with total revenue of EUR 88 million and EBITDA of EUR 56 million in 2020.
The transaction price corresponds to an enterprise value for 100 percent of EUR 1.52 billion on a cash and debt-free basis. This equals an EV/EBITDA multiple of 27 times the 2020 level. The proceeds will be retained and enable deleveraging that is expected to result in a proforma net debt to EBITDA ratio of around 2.1 times, including the Telia Carrier proceeds.
If and when there is a transfer of the tower assets from their respective business units, there is likely to be a need to review the remaining carrying values of the business units. The transaction is subject to customary regulatory approvals and closing is expected take place in the fourth quarter of 2021
Telia Company will enter into an anchor tenant agreement with Telia Towers in Finland and Norway based on current price levels, for an initial period of eight years, extended automatically with two extension terms of five years each.
The operator had announced the review by Telia Asset Management of the Finnish and Norwegian towers earlier this year, to develop its digital infrastructure assets and “crystalise value”.
The operator said it has the largest tower infrastructure footprint in the Nordic and the Baltic regions, with approximately 25,000 towers and rooftop sites.
Telia said Brookfield and Alecta are two of the largest owners and operators of real assets in their respective regions. Combined, they have more than USD 600 billion of assets under management, a “relevant” global data infrastructure platform and “deep” ties to the Nordic region.
Brookfield’s infrastructure business owns and runs assets in the data, utilities, transport, and midstream sectors in North and South America, Asia Pacific and Europe. It has a tower portfolio of 185,000 contracted sites in six markets including India, France, the UK and New Zealand. It also has 20,000 km of fibre and over 50 data centres.
Alecta is a Swedish pension fund founded in 1917 and has over SEK 1.10 trillion assets under management, with 2.6 million private customers and 35,000 customer companies.
Telia Company has been advised by Goldman Sachs, Roschier, Kvale, EY and Altman Solon.
