Lyntia, a fiber owner and operator in Spain which is backed by Antin Infrastructure Partners, has been named in press reports from Expansión noting that the company is being put up for sale by its owner Antin Infrastructure, via an auction process, at a valuation of €4bn+ ($4.5bn USD). Notably, Lyntia operates two distinct units, Lyntia Access and Lyntia Networks, which reports indicate i) have recently been separated into two different companies, and ii) could be sold to two separate buyers, in order to maximize sale proceeds. Specifically, these two units comprise:

  1. Lyntia Access: wholesale fiber-to-the-home (FTTH) operator in Spain
  2. Lyntia Networks: dark and enterprise fiber provider in Spain
Lyntia’s Fiber Optic Network

Recent fiber M&A transactions in Spain at attractive valuations may have prompted Antin Infrastructure to explore a sale of Lyntia. Over the past three months, sales of Reintel and Adamo have proved relevant benchmarks:

  • Reintel: in December 2021, KKR agreed to acquire a 49% stake in Red Eléctrica’s Reintel, a dark fiber operator in Spain, at a €2.3bn valuation, equating to 22.1x EBITDA
  • Adamo: in October 2021, Ardian Infrastructure agreed to acquire 100% of Adamo Telecom Iberia, a fiber broadband provider in Spain, from private equity firm EQT, for up to €1.2bn, equivalent to 25x+ EBITDA

Below we provide an overview of Antin Infrastructure’s Lyntia and its two key fiber businesses, Lyntia Access and Lyntia Networks, as well as background on the reported sale process.

Lyntia Access – Wholesale Fiber-to-the-Home (FTTH)

As of the end of 2021, Lyntia’s wholesale fiber-to-the-home (FTTH) network reportedly passes 2.3 million homes, particularly in small towns and rural areas of Spain. By controlling/acquiring the fiber networks of established operators (see below), Lyntia gains a high penetration rate in its markets of operation.

To this end, Lyntia reportedly has a 25% penetration rate, implying that the company has 500k+ active customers through the 2.3 million homes that its fiber network passes.

Acquisitions in Andalusia and Valencia

In December 2019, Lyntia acquired several fiber-to-the-home (FTTH) networks comprising 344k passed homes in Andalusia and Valencia, Spain. Specifically, Lyntia purchased the fiber networks from internet service providers (ISPs), namely Avatel, TVHoradada, Axartel, Gartel, and Universal Fibra.

As part of these transactions, Lyntia agreed to provide wholesale FTTH services to these operators. Therefore, via this wholesale business model, the ownership and operation of the fiber infrastructure shifted to Lyntia. Whereas the ISPs continued to offer broadband services directly to existing and new consumers, by contracting to use Lyntia’s fiber network.

Notably, Lyntia acquired these FTTH networks mainly through indefeasible right of use (IRU) agreements on a term of 99 years.

Backhaul

Lyntia can also leverage its wholesale fiber-to-the-home (FTTH) network build-out for its Lyntia Networks dark fiber business (see next section). Particularly, fiber can efficiently backhaul data traffic from network endpoints such as towers. Indeed, this is becoming increasingly important as 5G networks are deployed in Spain.

Lyntia Networks – Dark and Enterprise Fiber

Lyntia’s metro (intra-city) and long-haul (inter-city) fiber networks span 26.0k miles (41.8k kilometers). Primarily, this fiber network traverses the electrical lines of utility companies including Naturgy, Iberdrola, and Endesa.

Overall, Lyntia has indefeasible right of use (IRU) agreements in-place with these companies to monetize the excess capacity on their fiber networks. Additionally, Lyntia has organically deployed fiber to build-out its dark and enterprise fiber network.

Connectivity

Lyntia’s fiber optic network provides services to 2.7k towns and cities across Spain, including major cities like Madrid, Barcelona, Valencia, Seville, and Bilbao. This fiber network connects to 59.5k on-net buildings and 97.7k near-net buildings throughout Spain.

Additionally, Lyntia’s network connects to major subsea cable landing stations in Spain and Portugal. Finally, the network has international terrestrial interconnection links with France and Portugal.

Antin Infrastructure – Sale of Lyntia Access and Networks

Lyntia is owned by French private equity firm Antin Infrastructure Partners, via its €3.6bn Fund III vehicle. In July 2018, Antin Infrastructure acquired Ufinet Group’s Spanish business from private equity firm Cinven at a €2bn valuation. Subsequently, in 2019, the business was re-branded as Lyntia.

Following ~3.5 years under Antin Infrastructure’s ownership, it appears that Lyntia is up for sale. To this end, press reports indicate that Lyntia will begin a competitive auction sale process during the second week of January 2022. Furthermore, investment banks Banco Santander, Deutsche Bank, and UBS are managing the sale process.

Reportedly, Antin Infrastructure is seeking a whole-company valuation for Lyntia of €4bn+ ($4.5bn USD) and is willing to sell Lyntia Access and Lyntia Networks to two separate buyers. As a reference point, Lyntia purportedly generated EBITDA of €95m in 2020, with EBITDA for 2021 expected to be significantly higher.

Potential Acquirors

Press reports from Expansión name several potential suitors for Antin Infrastructure’s Lyntia, which fall into three different categories based on their interest in the Access and Networks fiber units:

Strategics and Private Capital – Fiber-to-the-Home (FTTH)

Lyntia Access, the company’s wholesale fiber-to-the-home (FTTH) unit, could attract the same suitors from EQT’s Adamo sale process. Indeed, with Ardian Infrastructure’s backing, Adamo could be a strategic buyer because of its similarities with the Lyntia Access business. At the same time, Onivia, which has sponsorship from Macquarie Capital and Aberdeen Standard Investments (abrdn plc), could be another strategic suitor.

Additionally, private equity firms and infrastructure investors that will reportedly show interest in Lyntia Access are GI Partners, InfraVia Capital Partners, I Squared Capital, Asterion Industrial Partners, and Goldman Sachs Infrastructure.

Private Capital – Dark Fiber Focus

Lyntia Networks, the company’s dark and enterprise fiber unit, could interest the same suitors that did not prevail in Red Eléctrica’s Reintel sale process. Ultimately, Reintel was sold to KKR’s core infrastructure strategy, a lower risk but also lower cost of capital buyer profile.

Overall, these participants included partnerships between i) MEAG, the asset manager of Munich Re and ERGO, with EDF Invest and ii) AXA IM and Swiss Life Group. Additionally, investors including Allianz, PGGM, Queensland Investment Corporation (QIC), and Vauban Infrastructure were present.

Tower Companies

Recently, two of the largest independent tower companies globally have both been expanding their businesses beyond solely tower infrastructure. As such, both Cellnex and American Tower could be suitors of Lyntia:

  • Cellnex: currently has a fiber-to-the-tower (FTTT) roll-out in France ongoing with Bouygues, with a planned investment of €1bn through 2027
  • American Tower: expanding beyond towers to be a neutral host focusing on multi-tenant digital infrastructure – recently showcasing this strategy through the company’s $10.1bn acquisition of CoreSite

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