Proceeds will be used to reduce debt, help it achieve investment grade credit rating by the end of next year
Stonepeak and Cellnex Telecom have agreed that Stonepeak will acquire a 49% interest in Cellnex Sweden and Cellnex Denmark (known as Cellnex Nordics) for €730 million. This is the equivalent of 24x the estimated Earnings Before Interest, Taxes, Depreciation, Amortization, and Special Losses (EBITDAL) for 2024.
Cellnex will continue to manage the day-to-day business of Cellnex Nordics and consolidate the results of its operations. It has a network totalling 4,557 sites across the two countries. The company also has commitments and options to build and operate about 2,500 more sites in the region.
The transaction is subject to regulatory approvals and is expected to be completed by the first quarter of 2024. Cellnex will use the proceeds of this deal to reduce its debt, in line with objectives it set in November 2022 which are organic growth and achieving an investment grade credit rating by the end of next year.
News that Cellnex was considering selling a stake in its Nordic unit first surfaced in July. Cellnex signed a €315 million loan to with the European Investment Bank (EIB) to boost 5G mobile infrastructure in Spain, Portugal, France, Italy and Poland the same month.
Reuters reports that the deal is locked for five years after which each company will have preemptive rights to buy if the other seeks to sell. After eight years, Cellnex will have the right to buy back the assets and Stonepeak will have the right to sell to a third party.
The market reacted positively, increasing the share price by 4.2% in early trading.
Marco Patuano, Cellnex CEO, commented: “The sale of a stake in our Nordic business at an appropriate valuation marks another significant step forward in our goal to attain investment grade ratings. The agreement with Stonepeak shows Cellnex’s ability to attract the interest of high-quality financial partners who understand and value the inherent quality of the assets as well as the future opportunities in these markets.”
Cyrus Gentry, Stonepeak Managing Director, said: “We believe Cellnex Nordics, as the region’s leading independent tower company, is strategically well positioned to capture outsized organic and inorganic growth over the coming years. We view partnering with Cellnex, with its consistent track record of financial performance, execution on built-to-suit delivery, and mergers and acquisitions, as a natural fit for Stonepeak’s Core infrastructure strategy. We look forward to working closely with the Cellnex team to help further their strategic objectives in both Sweden and Denmark.”
Nomura International is serving as lead financial advisor, Guggenheim Securities is serving as financial advisor, and Herbert Smith Freehills LLP is serving as legal counsel to Stonepeak. AZ Capital is serving as financial advisor and Baker & McKenzie LLP is serving as legal counsel to Cellnex.