GlobalConnect Group, a fiber provider and data center operator in the Nordics backed by EQT Infrastructure, today announced the completion of a €2.7bn debt refinancing with a group of 14 lenders.
Debt Refinancing – GlobalConnect
Overall, ING and SEB coordinated a consortium of five active bookrunners, three underwriters, and six cornerstone lenders. In total, the below lenders committed senior debt facilities of €2.7bn:
- Active Bookrunners: ABN AMRO, ING, Santander, SEB, and Société Générale
- Underwriters: KFW IPEX-Bank, NatWest, and Nykredit Bank
- Cornerstone Lenders: BNP Paribas, CDPQ, Crédit Agricole CIB, Deutsche Bank, National Australia Bank, and Nordea
The refinancing by EQT’s GlobalConnect demonstrates the strong demand and breadth of banks and institutional lenders willing to finance fiber infrastructure.
Use of Proceeds
GlobalConnect Group’s new debt refinances loans previously held separately by GlobalConnect, which is focused on Denmark and Norway, and Sweden-based IP-Only. Notably, in December 2019, EQT Infrastructure merged its portfolio companies GlobalConnect and IP-Only.
Additionally, GlobalConnect will use a portion of the refinancing proceeds to expand its fiber roll-out in Northern Europe (see below).
Financial Metrics
During 2020, GlobalConnect generated adjusted EBITDA of €272m, which implies a metric of ~10x debt-to-EBITDA. However, the debt refinancing was likely sized off of GlobalConnect’s asset base and capital expenditure program since the company’s EBITDA / cash flow is not currently at a stabilized level.
Assuming leverage ratios of 60% to 70%, this implies a valuation of GlobalConnect’s business between €3.9bn to €4.5bn.
Fiber Roll-Out – GlobalConnect
GlobalConnect intends to use a portion of the debt refinancing proceeds to expand its fiber footprint in existing markets and to enter new markets in Northern Europe.
As a reference point, in 2020, GlobalConnect invested €487m in capital expenditures to primarily fund more fiber builds. Of this total spend, GlobalConnect geographically split the capital expenditures between Sweden (68%), Norway (18%), and Denmark / Germany (14%).
Competition
GlobalConnect is building fiber to serve customers in both the business-to-business (B2B) and business-to-consumer (B2C) segments. Specifically, the company competes against incumbent national operators in Northern Europe including Telia, Tele2, Telenor, and TDC.
Transaction Advisors – EQT Infrastructure
Finally, EQT Infrastructure’s legal advisor for the GlobalConnect refinancing was Latham & Watkins.
