American Tower to Become Major Player in Europe With Telxius Acquisition

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American Tower Corporation (NYSE: AMT) today announced that it has entered into definitive agreements with Telefónica, S.A., under which it will acquire Telxius Towers, comprising approximately 31,000 existing communications sites in Germany, Spain, Brazil, Chile, Peru and Argentina. The total consideration for the transaction is an estimated $9.4 billion (€7.7 billion), subject to customary closing adjustments. In addition, American Tower expects to spend approximately $500 million to construct a committed pipeline of approximately 3,300 new sites in Germany and Brazil through 2025.

American Tower expects the assets to generate an estimated $775 million in property revenue, approximately $410 million in gross margin, and approximately $390 million in Adjusted EBITDA at current foreign exchange rates, in their first full year in its portfolio, pro forma for contributions from the committed future build-to-suits. This implies an Enterprise Value/Adjusted EBITDA multiple of less than 26x. AMT said the deal will close in multiple tranches, beginning in the second quarter of 2021. 

“This transaction is transformational for our European business and will establish American Tower as one of the largest independent communications infrastructure providers in Europe,” Tom Bartlett, American Tower’s Chief Executive Officer said. “It is also complementary for our Latin American portfolio and positions us to drive strong long-term organic growth across both regions while augmenting our new build programs and enhancing our relationships with key tenants. We are excited to broaden our partnership with Telefónica by acquiring a high-quality, well-located portfolio of sites that will further diversify our global footprint and enhance our ability to help provide broadband connectivity for billions of people.”

American Tower said it intends to finance the transaction in a manner consistent with maintaining its investment grade credit rating and has obtained committed financing from Bank of America, N.A. BofA Securities, Inc. is serving as lead financial advisor to American Tower, who is also being advised by CDX Advisors and EA Markets.

According to Bloomberg, the transaction is anticipated to be immediately accretive to Consolidated AFFO per Share and is subject to government and regulatory approvals and customary closing conditions.

 

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