Brookfield, investing out of its core infrastructure fund, in-partnership with Alecta, a Swedish pension fund, today announced the acquisition of 49% of Telia Company’s 4.7k towers in Finland and Norway for €722m. Notably, Brookfield and Alecta are not acquiring Telia’s 1.6k towers in Sweden, towers joint venture in Demark, or towers in the Baltics, as part of this transaction.

Telia Company will enter into an anchor tenant agreement with Telia Towers in Finland and Norway for an initial period of 8 years. Additionally, the agreement will have automatic extensions for two subsequent terms of 5 years each.

Finally, the transaction is expected to close in Q4 2021.

Transaction Valuation – Brookfield, Alecta Acquire Telia Towers

Brookfield and Alecta’s transaction for Telia Towers implies an enterprise value for 100% of the business of €1.5bn. For 2020, Telia Towers generated revenue of €88m and EBITDA of €56m.

Overall, Brookfield and Alecta’s valuation of Telia Towers equates to an EV/EBITDA multiple of 27.2x. Additionally, on an Enterprise Value per tower basis, the valuation equates to €324k per tower, on the 4.7k tower sites.

Transaction Rationale – Brookfield, Alecta Acquire Telia Towers

Telia Company’s sale of a 49% stake in its 4.7k towers in Finland and Norway aligns with its strategy to crystalize the value of its digital infrastructure.

Upon completion of the transaction, Telia Company will receive total cash proceeds of €722m for the sale of its 49% stake. Specifically, these proceeds will be used by the company to repay its corporate-level debt. Indeed, this debt paydown will result in a pro forma net debt-to-EBITDA of ~2.1x.

Given that Telia is only selling a minority stake in Telia Towers, it is maintaining ownership of its digital infrastructure. Overall, Telia Company has the largest tower infrastructure portfolio in the Nordics and Baltics, comprising ~25.0k towers and rooftop sites.

Brookfield Core Infrastructure Fund – Overview

Brookfield’s core infrastructure fund invests in the sectors of data, utilities, transport, and midstream across North America, South America, Asia-Pacific, and Europe. In terms of digital infrastructure investments, Brookfield has an extensive portfolio which includes towers, data centers and fiber:

  • Towers: Brookfield owns a portfolio of 185k contracted sites across six markets, including India, France, the UK, and New Zealand
  • Data Centers: Brookfield owns 50+ data centers globally through companies including Evoque in the U.S., Ascenty in Brazil, and DCI Data Centers in Australia
  • Fiber: Brookfield operates a portfolio of 12.4k route miles (20.0 route kilometers) of fiber

Brookfield’s core infrastructure fund sits within Brookfield Infrastructure Partners and is ultimately part of Brookfield Asset Management.

Alecta – Overview

Alecta is a Swedish pension fund with $129bn+ in assets under management. The firm has 2.6 million private customers and 35.0k customer companies.

Transaction Advisors – Telia Company

Telia Company’s financial advisor was Goldman Sachs. Additionally, Telia Company’s legal advisor was Roschier.

Adam Simmons is the Founder & CEO of Dgtl Infra. He started his career with an S&P 500-listed big box retailer, in an operations management role. Adam's entrepreneurial "itch" led him to start a 5G-driven company, focused on innovative retail solutions using augmented reality and shoppable videos, which was eventually sold to an advertising and consulting group. After, realizing the potential of 5G, Adam shifted his efforts towards investing in the "building blocks" of 5G - known as digital infrastructure, completing a number of strategic investments, buying cellular towers, data centers and fiber networks.

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