Vodafone Group announced that it will proceed with an initial public offering (IPO) of Vantage Towers AG, a tower infrastructure company in Europe.
Vantage Towers AG will seek a listing on the Regulated Market of the Frankfurt Stock Exchange, and the offering will consist solely of a secondary sell-down of existing shares held by Vodafone GmbH.
The Vantage Towers IPO is expected to be completed by the end of March 2021. Vantage Towers did not reveal the size of the IPO.
“The IPO is an important milestone and sets the foundations for the next stage of our growth within the dynamic towers industry. We will be looking to capture the exciting value-creating opportunities the sector has to offer and to build on our position as a leading tower infrastructure company in Europe,” Vivek Badrinath, chief executive officer of Vantage Towers, said.
Vantage Towers is a leading European tower infrastructure company with controlling or co-controlling interests in companies that own and operate approximately 82,000 macro sites across 10 European markets. In 9 of these 10 markets, Vantage Towers ranks either first or second by number of sites.
Vantage Towers’ average tenancy ratio of 1.39x across its macro site portfolio in its consolidated markets as of December 31, 2020 underpins substantial co-location and upgrade potential. This provides significant capacity for growth of its customer base and tenancies.
In the first 9 months of the year to 31 March 2021, Vantage Towers demonstrated strong commercial momentum by adding c.1,400 new tenancies, including c.500 previously non-committed tenancies which represented approximately one quarter of the non-committed tenancies needed to achieve its medium term tenancy ratio target of >1.50x.
Vantage Towers benefits from having leading positions in markets in which densification needs – driven by mobile data growth and 5G roll out, and government-mandated coverage obligations – are increasing demand for additional tenancies and new sites.
Vantage Towers is on track to build c.550 sites by 31 March 2021 and has commitments to build a further c.7,100 new macro sites across its consolidated markets by 31 March 2026.
Vantage Towers’ customer base is underpinned by its anchor tenant relationship with the Vodafone Group, Europe’s largest mobile operator by mobile subscribers, as well as relationships with other leading mobile operators.
Approximately 95 percent of Vantage Towers’ pro forma revenues for the twelve months ended 31 March 2020 and the nine months ended 31 December 2020 were derived from mobile operators that hold investment grade credit ratings, providing secure and resilient cash flows.
Vantage Towers’ relationship with the Vodafone Group is supported by secure, long-term, inflation-linked contracts, which are expected to provide predictable and growing cash flows over the medium- and long-term.
Active network sharing arrangements in place between Vodafone and other leading mobile operators means Vantage Towers provides critical infrastructure for two of the largest mobile operators in each of the markets in which it operates.
Vantage Towers has secured commitments to construct c.7,100 new macro sites in its consolidated footprint over the next five financial years with Vodafone and Wind Hellas in Greece. Through its co-controlling joint ventures in Cornerstone and INWIT, it also has commitments for a further c.1,200 sites in the United Kingdom over the next four years and c.2,400 sites in Italy, which INWIT is targeting to build by the end of 2026.
For the year to 31 March 2020 and the first 9 months of the year to 31 March 2021, Vantage Towers’ pro forma Adjusted EBITDAaL was €513 million and €394 million, respectively, representing a pro forma Adjusted EBITDAaL margin of 54 percent for both periods, and Vantage Towers’ pro forma Aggregated Adjusted EBITDAaL was €730 million for the year to 31 March 2020.
Vantage Towers is exploring growth through incremental organic investments in addition to its guidance around the BTS and GLBO programs and/or strategic M&A. It has €1 billion of leverage capacity for such opportunities, which can be complemented by the issuance of equity.
Vodafone and Vantage Towers have engaged BofA, Morgan Stanley and UBS as Joint Global Co-ordinators, and Barclays, Berenberg, BNP Paribas, Deutsche Bank, Goldman Sachs and Jefferies as Joint Bookrunners.