Phoenix Tower International (PTI), an independent tower company operating in the Americas and Europe, which is backed by Blackstone, today announced that it has agreed to acquire up to 3,800 telecommunications sites from WOM in Chile, for total consideration of ~$930 million, implying a valuation of $245k per tower.
Initially, Phoenix Tower will acquire 2,334 tower sites (61% of total) from WOM, paying a portion of the consideration upfront, which is expected to occur in Q3 2022. Subsequently, Phoenix Tower will purchase an additional 1,466 tower sites (39% of total) by 2024, paying the remaining consideration.
Phoenix Tower Buys Sites from WOM in Chile
Phoenix Tower’s acquisition of 3,800 telecommunications sites from WOM marks the company’s entry into the wireless infrastructure market in Chile. At the same time, Phoenix Tower becomes a significant independent communications tower owner in the country, on-par with American Tower (3,871 sites in Chile) and ahead of Andean Telecom Partners (1,000+ sites in Chile), which is backed by DigitalBridge.
Importantly, Phoenix Tower has existing relationships with all four mobile network operators (MNOs) in Chile, namely Entel, Movistar (Telefónica), Claro (América Móvil), and WOM. Moreover, each of these operators will be deploying 5G networks in the near-term, providing Phoenix Tower with colocation opportunities for its new tower portfolio.
Debt and Equity Financing
Debt financing for the acquisition will be led by Scotiabank and supplemented by Phoenix Tower’s other debt financing partners, CDPQ (Caisse de dépôt et placement du Québec) and Ares Management (formerly AMP Capital’s Infrastructure Debt platform).
Additionally, the equity for the transaction will be provided by various Blackstone funds, including Blackstone Infrastructure Partners (BIP) and Blackstone Tactical Opportunities (Tac Opps).
Strategic Rationale for WOM
In Chile, WOM holds a >20% market share and serves over 7 million customers. Also, in terms of ownership, WOM is a portfolio company of London, UK-based private equity firm Novator Partners.
With the sale of its towers, WOM will have greater financial resources to provide customers with better connectivity services and expand its 5G coverage. To this end, in March 2021, WOM secured, via Chile’s 5G auction, 100 MHz of low/mid-band and 400 MHz of 26 GHz spectrum. By December 2021, WOM had activated its 5G network in parts of the country.
At the same time, WOM intends to expand its coverage into rural areas of Chile by upgrading its connectivity.
Phoenix Tower’s financial advisor was Scotiabank. Additionally, Phoenix Tower’s legal advisors were Greenberg Traurig, Simpson Thacher & Bartlett, Choate Hall & Stewart, and Barros Silva Varela & Vigil.
WOM’s financial advisor was Citi. Additionally, WOM’s legal advisors were Allen & Overy and Albagli Zaliasnik.
Phoenix Tower International (PTI) – Overview
Pro forma for the WOM deal in Chile and pending transactions, Phoenix Tower will own and operate over 22,000 telecom towers. Geographically, the company’s tower portfolio spans 19 countries throughout the United States, Europe, Mexico, South America, Central America, and the Caribbean.
Phoenix Tower’s key shareholders are Blackstone Infrastructure Partners (BIP), which acquired a 35% stake in the company, in January 2022, as well as Blackstone Tactical Opportunities (Tac Opps), which has been an investor in Phoenix Tower since 2014.