Vodafone sells stake in Vantage Towers to KKR, other investors

Vodafone said it would sell a significant portion of its majority stake in wireless towers business unit Vantage Towers to private equity firms GIP and KKR.
Vantage Towers
Vodafone, which has over 300 million mobile customers, more than 28 million fixed broadband customers and 22 million TV customers, will use the minimum proceeds of 3.2 billion euros to pay down its debt. Vantage Towers has  around 83,000 sites in ten countries.

The British telecoms group said it would create a new joint venture with the investors, which would result in the deconsolidation of its 81.7 percent stake.

The joint venture would also buy out the minority shareholders in Frankfurt-listed Vantage, it said on Wednesday.

The transaction values Vantage Towers at an equity value of €16.2 billion, implying an EV / adjusted EBITDAaL multiple of 26x for the 12 month period ended 31 March 2022.

Minimum cash proceeds to Vodafone will be €3.2 billion and maximum cash proceeds will be €5.8-7.1 billion, depending on the take up in the voluntary takeover offer and subject to GIP and KKR raising further equity before closing to increase their stake in the JV to 50 percent.

Nick Read, Vodafone Group Chief Executive said: “This is a landmark moment for both Vodafone and Vantage Towers. This transaction delivers on Vodafone’s stated aims of retaining co-control over a strategically important asset, deconsolidating Vantage Towers from our balance sheet to ensure we can optimize its capital structure and generate substantial upfront cash proceeds.”

Germany-headquartered Vantage Towers, which was founded in 2020, had gross assets of €10.5 billion as at 31 March 2022. Vantage Towers generated profit before tax of €251 million for the 12 months ended 31 March 2022.

Robey Warshaw and UBS are acting as financial advisers to Vodafone, and Linklaters is acting as legal adviser to Vodafone.