OMERS Infrastructure, a division of Canadian pension fund OMERS, today announced that it has agreed to acquire Stilmark Group, an independent developer, owner, and operator of mobile tower assets in Australia. With the acquisition of Stilmark, OMERS Infrastructure is quickly expanding on its recent agreement – announced just last month – to purchase 1,237 mobile tower and rooftop sites in Australia from TPG Telecom for A$950m ($670m USD).
Since 2017, ATN International (NASDAQ: ATNI), through its venture capital arm, ATN Ventures, has held a minority equity interest in Stilmark Group. In addition to ATN, Stilmark is currently owned by its founders, management team, and family offices. While Five V Capital, an Australian private equity firm, notes that Stilmark is part of its historic venture capital portfolio.
Finally, closing of the OMERS Infrastructure and Stilmark transaction will occur in Q3 2022.
Stilmark Group – Overview
Stilmark Group was founded in 2013 and is headquartered in Sydney, Australia. The company constructs, owns, and maintains telecommunications towers in Australia, offering turn-key tower deployment for mobile network operators.
Presently, Stilmark operates ~75 towers in Australia, with the majority of these sites in the southeastern states of New South Wales and Victoria.
Additionally, Stilmark controls a significant development pipeline of towers. Further, the company states that all of its sites are secured under long-term revenue agreements.
Capital Structure – Existing
In September 2020, Stilmark secured debt of A$130m ($92.5m USD), through a senior syndicated loan facility from AMP Capital. The purpose of this debt financing was to support the company’s construction and deployment of new mobile tower infrastructure across Australia.
In terms of equity, as of Q1 2022, ATN International owned ~24% of the outstanding voting equity in Stilmark and pegged its investment at a carrying value of $14.8m USD. In turn, this implies that 100% of Stilmark’s equity, at ATN’s valutation, would be valued at ~$61.7m USD.
Stilmark has delivered development and build projects for Australia’s second and third largest wireless carriers, namely Optus (Singtel) and TPG Telecom.
Stilmark is led by Russell Stanners as Chief Executive Officer. Previously, Stanners was the Chief Executive Officer of Vodafone New Zealand.
Upon closing both its acquisition of towers from TPG Telecom and the Stilmark purchase, OMERS Infrastructure states that the units will be a “consolidated towers business” in Australia. Therefore, OMERS may combine Stilmark’s tower assets and management team with the 1,237 sites it is acquiring from TPG Telecom, creating an Australian tower company with greater scale.
OMERS Infrastructure and Stilmark are familiar partners. In November 2020, OMERS Infrastructure, ATN International, and Stilmark formed the Symphony Consortium, a partnership to jointly pursue opportunities in Australian telecommunications infrastructure. These “opportunities” included pursuing the major tower sales by Telstra, Optus (Singtel), and Axicom – which all ultimately went to other buyers.
Transaction Advisors – OMERS Infrastructure and Stilmark Group
OMERS Infrastructure’s financial advisor was RBC Capital Markets. Additionally, OMERS Infrastructure’s legal advisor was Corrs Chambers Westgarth.
Stilmark Group’s financial advisor was Q Advisors. Additionally, Stilmark Group’s legal advisor was Kain Lawyers.
OMERS Infrastructure – Overview
OMERS Infrastructure is the infrastructure investment manager of OMERS, the defined benefit pension plan for municipal employees in the Province of Ontario, Canada. Presently, OMERS Infrastructure has ~$32bn Canadian dollars ($24.7bn USD) in assets under management (AUM) on behalf of OMERS and third-party investors.
OMERS Infrastructure invests in sectors including energy, digital, transportation, and government-regulated services. Within digital infrastructure, excluding its pending acquisitions of TPG Telecom’s towers and Stilmark, OMERS has made two investments to-date, both in Europe:
- Deutsche Glasfaser: in 2020, EQT Infrastructure (51%) and OMERS (49%) acquired Deutsche Glasfaser, a fiber-to-the-home (FTTH) provider to more than 600k households and 5k businesses across Germany
- XP Fibre: formerly SFR FTTH Network; XP Fibre is an alternative FTTH infrastructure wholesale operator in France, with a target of 5 million homes passed in the coming years