UPDATE Spark New Zealand said the Ontario Teachers’ Pension Plan Board will acquire a 70 percent interest in its TowerCo business. Spark’s TowerCo owns and operates approximately 1,263 sites in New Zealand. The transaction values the business at $800 million, representing a FY23 pro-forma EBITDA multiple of 33.8x.
Spark expects net cash proceeds of $610 million at completion, which is subject to Overseas Investment Office approval, and is anticipated to occur in the first half of FY23. Under the terms of the deal, Spark has entered into a 15-year agreement with TowerCo (plus rights of renewal) to secure access to existing and new towers, with a build commitment of 670 sites over the next 10 years.
Spark New Zealand Chair, Justine Smyth said: “The establishment of TowerCo will accelerate Spark’s strategic objective of delivering a smart, automated network, while maximizing value for shareholders. The transaction will deliver proceeds of $900 million, enabling direct shareholder returns and investment in future growth opportunities that will accelerate Spark’s transition from traditional telecommunications to higher growth digital services. Spark intends to release an updated capital management policy at its full year results on August 24.”
Spark CEO Jolie Hodson said the company saw a high level of market interest in its passive mobile assets: “We are pleased to have formed this strategic partnership with Ontario Teachers’ – a high-caliber investor with a long-term partnering focus and significant experience managing a portfolio of infrastructure investments globally, including within Australia and New Zealand. Our intention in establishing TowerCo is twofold – it allows us to deliver better outcomes and service experience for our customers and Aotearoa through faster, more efficient deployment of digital infrastructure, and it better realizes the value of our passive mobile assets, maximizing value for shareholders and enabling us to invest in future growth opportunities.”
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