TPG divests mobile tower assets in deal valued at $950 million

TPG divests mobile tower assets in deal valued at $950 million

TPG Telecom (ASX: TPG) has offloaded 1,237 tower and rooftop mobile infrastructure sites to Canadian investor and asset manager OMERS Infrastructure in a deal that gives the portfolio an enterprise value of $950 million.

The Australian telecommunications company anticipates it will receive net cash of approximately $890 million from the sale, which it will use to repay existing bank debt.

According to TPG, the transaction implies an enterprise value of approximately 32.1 times, which it says reflects “the important role the Tower Assets will play in supporting the projected growth and diversification requirements of the industry”.

The portfolio includes 1,237 tower assets (428 towers and 809 rooftops) and represents approximately 21 per cent of TPG’s total mobile network footprint.

New owner OMERS will also pick up a 20-year master services agreement, which includes an option for TPG to extend the timeframe.

TPG Telecom CEO and managing director Iñaki Berroeta said he was “delighted” to achieve a strong outcome for shareholders with the divestment of the assets which follows a strategic review.

“The tower sale demonstrates the disciplined approach we are taking to asset utilisation and capital allocation as we pursue opportunities to unlock value and maximise our potential for customers and shareholders. It builds on the landmark multi-operator core network (MOCN) agreement we announced in February of this year to enable regional network sharing with Telstra,” Berroeta said.

“We are excited to welcome OMERS as a strategic partner and long-term custodian of these mobile network sites.

“We look forward to working with OMERS to transition the business and then to support its growth as it provides critical telecommunications infrastructure services to our customers and the broader Australian telecommunications sector.”

The telco estimates, on a preliminary basis, that it will recognise an accounting gain on the sale of approximately $350 million to $400 million after tax.

Though the sale is subject to Foreign Investment Review Board approval, TPG expects the deal to close in the third quarter of the current financial year.

Shares in TPG are down 0.36 per cent to $5.55 per share at 10.41am AEST.

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