Phoenix Tower today announced an agreement to purchase over 815 wireless towers in Malta and Cyprus, from Monaco Telecom through a 20-year sale-leaseback deal. Additionally, the transaction includes a build-to-suit (BTS) program to construct new tower sites, over the next 6 years, across Malta and Cyprus.

Overall, the transaction with Monaco Telecom positions Phoenix Tower as the largest tower infrastructure provider in both Malta and Cyprus. Additionally, Phoenix Tower expands its growing presence in Europe which also includes towers in France, Italy, and Ireland.

Phoenix Tower – Overview

Phoenix Tower International owns and operates over 10k towers and 610 route miles of fiber. Specifically, this portfolio spans across 16 countries including the United States, Europe, and Latin America. Indeed, Phoenix Tower was founded in 2013 with a mission to be a premier site provider to wireless operators across high-growth international markets. Phoenix Tower’s investors include Blackstone, John Hancock, and various members of the management team.

Transaction Rationale – Phoenix Tower and Monaco Telecom

Phoenix Tower is continuing to grow its neutral host independent tower business model in two new markets in Europe. As a result, the company is facilitating increased coverage for wireless carriers in Malta and Cyprus. In turn, these wireless carriers can offer increased connectivity to their customers in these countries. Importantly, Monaco Telecom intends to use the transaction proceeds for investments in 5G spectrum and fiber roll-outs.

Monaco Telecom – Overview

Monaco Telecom is the incumbent operator of the Principality of Monaco. The company delivers fixed, internet, TV, and mobile services.

Monaco Telecom owns Epic, a telecommunications provider in Cyprus (formerly MTN Cyprus) and Malta (formerly Vodafone Malta). Notably, in December 2019, Monaco Telecom purchased Vodafone Malta from Vodafone Group for an Enterprise Value of €250m. The transaction valuation was 7.8x EBITDA and 13.1x Operating Free Cash Flow.

Monaco Telecom is owned by the Government of Monaco and by NJJ Holding, which is backed by French businessman Xavier Niel. Indeed, Xavier Niel also controls Iliad, a telecommunications provider in France (Free), Italy, and Poland (Play).

Xavier Niel – Unlocking Value in Tower Infrastructure

Today’s announcement is the fourth recent example that Xavier Niel-controlled companies have sought ways to monetize their tower assets. Moreover, this is the second time in which Phoenix Tower has acquired towers from these Xavier Niel-backed companies. Specifically, these transactions include:

Iliad (Play) and Cellnex – Poland

Firstly, in October 2020, Cellnex partnered with Iliad in a €2.6bn deal, to acquire 7.0k towers from wireless carrier Play in Poland. Specifically, the transaction equates to an Enterprise Value per tower of €191k and represents a 16.2x EBITDA multiple.

Iliad (Eir) and Phoenix Tower – Ireland

Secondly, in May 2020, Phoenix Tower acquired 650 towers in Ireland from wireless carrier Eir (owned by Iliad) for €300m. Specifically, the tower portfolio transaction equates to an Enterprise Value per tower of €462k and represents a 28x EBITDA multiple.

Iliad and Cellnex – France and Italy

Thirdly, in May 2019, Cellnex acquired 7.9k towers in France and Italy from Iliad at a €2.6bn valuation, assuming 100% ownership. Specifically, the transaction equates to an Enterprise Value per tower of €329k and represents a 16.3x EBITDA multiple.

For further comparable transactions, check out our comprehensive list of towers precedent M&A transactions here.

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