$NZ1.7bn towers sale generates strong returns
19 Jul 2022 - Performance
Brookfield Asset Management and Infratil (ASX/ NZX: IFT) have achieved strong partial returns on their investments in Vodafone New Zealand with the $NZ1.7 billion ($1.5 billion) sale of the company’s mobile phone towers infrastructure business.
The business, now to be known as TowerCo, has been acquired by Canadian private markets investment firm Northleaf Capital and UK firm InfraRed Capital Partners, which will hold 40% each. InfraRed will be investing on behalf of HICL Infrastructure Plc. Infratil will be reinvesting part of its return for a 20% stake in the new business.
According to Infratil, the sale price represents a 33.8x multiple over of 2023 forecast EBITDA for the business.
Northleaf managing director Tom Irvine said: “This investment provides our investors exposure to an attractive and growing sector.”
TowerCo was an excellent fit with Northleaf’s communications infrastructure investment strategy as well as its broader strategy of investing in mid-market infrastructure assets in select OECD countries, Irvine said.
TowerCo will be the largest independent tower company in New Zealand with 1,484 wholly owned towers providing coverage to 98% of the population. The company will enter into a 20-year services agreement with Vodafone, with rights of extension. TowerCo has committed to develop at least 390 additional sites for Vodafone over the next ten years.
Completion of the deal is subject to New Zealand Overseas Investment Office approval.
Brookfield and Infratil retain their investments in Vodafone New Zealand made three years ago.
Image: A Vodafone New Zealand tower.