TPG Telecom to sell tower assets to OMERS for $950 million

“We are delighted to have concluded the strategic review of these assets with such a strong outcome for TPG Telecom shareholders. The transaction represents competitive long-term financing, which will reduce our total financial leverage and reduce borrowing costs,” said Iñaki Berroeta, CEO and Managing Director, TPG Telecom.

The sum values ​​TPG’s tower assets at an enterprise value/EBITDA of 32.1x. When complete, OMERS will integrate approximately 1,237 sites, including 428 towers and 809 rooftops, in key metropolitan locations and a bespoke development program of 252 new sites.

The deal is expected to generate net cash proceeds of approximately $890 million, which TPG Telecom will use to repay existing bank debt.

“The sale of the tower demonstrates the disciplined approach we are taking to asset utilization and capital allocation as we seek opportunities to unlock value and maximize our potential for customers and shareholders. builds on the landmark multi-carrier core network agreement we announced in February this year to enable regional network sharing with Telstra,” added Berroeta.

The company also expects an accounting gain from the sale of approximately $350 million to $400 million after tax, details will be provided in TPG’s full-year 22nd half results due August 19, 2022.

The agreement includes a 20-year master services agreement with an option to extend for TPG Telecom. The transaction is subject to customary conditions precedent, including Foreign Investment Review Board approval and, subject to the satisfaction of these conditions, is expected to close in the third quarter of FY22.

“We are delighted 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 by providing services essential telecommunications infrastructure to our customers and the wider Australian telecommunications industry,” added Berroeta.

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