Spark New Zealand has announced it has entered into an agreement to sell 70 per cent of its TowerCo business to the Ontario Teachers’ Pension Plan Board for NZ$900 million (AU$813 million). The TowerCo business consists of approximately 1,263 passive mobile tower asset sites.The sale includes a 15-year agreement, with rights of renewal, between Spark New Zealand and TowerCo to secure access to existing and new towers, including a commitment to build 670 new sites over the next decade. The sale is expected to close by the end of this year, subject to Overseas Investment Office approvals.
The announcement follows the commencement of Vodafone New Zealand’s market engagement process earlier this year to sell 100 per cent of its passive mobile tower assets. Vodafone New Zealand, which is owned by Brookfield Asset Management (50.1 per cent) and Infratil (49.9 per cent), has a tower portfolio in New Zealand comprising 1,487 mobile towers, covering approximately 98 per cent of New Zealand’s population.
In February, Spark New Zealand announced it would establish its TowerCo business as a subsidiary to hold the company’s passive mobile tower assets to allow the entry of third-party capital into the new entity. The transaction values the TowerCo business at approximately $1.2 billion, representing an enterprise multiple of 33.8 times earnings.
The announcement also follows a similar trend in Australia, with four recent telecommunication transactions in the Australian infrastructure pipeline. In June 2021, Telstra sold 49 per cent ofAmpitel Towersfor $2.8 billion to a consortium comprising the Future Fund, Commonwealth Superannuation Corporation, and Sunsuper.
In October 2021, Optus, a subsidiary of Singtel, entered into an agreement to sell a 70 per cent stake inAustralia Tower Networkto AustralianSuper for $1.9 billion.
In April this year, Macquarie Asset Management entered into an agreement to sell a 100 per cent stake inAxicom Towersto Australia Tower Network for $3.6 billion, and in May, TPG Telecom entered into an agreement to sell a 100 per cent stake in its passive mobile tower and rooftop infrastructure to OMERS Infrastructure Management for $950 million.
The sale of passive mobile infrastructure tower assets typically comprises the physical towers, masts and poles, foundations, and associated contractual rights to occupy the site area. It does not include spectrum, core mobile network, radio network or back-haul.