Telefonica said Telefonica Deutschland has agreed to sell approximately 10,100 sites to Telxius, its infrastructure company, for 1.5 billion euros .
The agreement includes the commitment to build 2,400 additional sites (BTS).
The sale of these towers has been closed at a multiple of c.23x EV/EBITDA, reflecting favourable market conditions for infrastructure deals.
The agreement will see Telxius double the size of its tower portfolio to over 32,800 and cements its position as one of the leading neutral infrastructure operators. Approximately 80 percent of its sites are in Europe, while the rest of the portfolio is in Latin America.
Telxius will finance 90 percent of the value of the acquisition via a capital increase. The balance 10 percent will be financed through incremental debt. Telxius is owned by Telefonica (50.01 percent), KKR (40 percent) while the remaining (9.99 percent) stake is owned by Pontegadea.
This transaction will reduce Telefonica Group’s net debt by approximately 500 million euros between 2020 and 2021, due to the contribution made by Telefonica’s partners in Telxius, net of the corresponding tax impacts.
In 2019, Telefonica closed the sale of more than 6,000 telecom towers (of which approximately 3,000 to Telxius) at an average implied multiple of 18x OIBDA.
The agreement strengthens the position of Telefonica Infra, a portfolio management unit which owns Telefonica Group’s stakes in infrastructure vehicles and has 50.01 percent of Telxius as its main asset.
In the last few months, Telxius has completed acquisitions of towers in Brazil and Peru. The creation of Telefonica Infra was one of the five strategic decisions taken under the New Telefonica plan unveiled on November 27, 2019.