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Spain’s Cellnex to buy Arqiva’s telecoms unit for £2bn – Financial Times

Spain’s Cellnex to buy Arqiva’s telecoms unit for £2bn – Financial Times

Cellnex Telecom has agreed to buy Arqiva’s telecoms unit for £2bn, a deal that will make the Barcelona-based group the largest independent operator of wireless infrastructure in the UK.

The Spanish group, which has approved the launch of a €2.5bn rights issue, plans to fund the acquisition through a £2bn syndicated loan facility and available cash reserves, a statement said on Tuesday. Adjusted earnings before interest, tax, depreciation and amortisation, are expected to be about £170m next year.

Towers have become a sought-after asset in recent years, attracting much higher valuations than the operating arms of telecoms companies. That has led many, including Vodafone, to separate out their masts in order to sell them.

Cellnex, Europe’s largest independent mobile mast operator, with this deal will add about 8,000 UK sites to increase its portfolio to about 53,000 across the continent. The deal is expected to close in the second half of next year.

Reports over the summer had suggested Arqiva’s owners planned to break up the company and separate its television and radio broadcast infrastructure from its independent mobile masts. Its telecoms division serves all four UK mobile network operators individually.

Most of the sale proceeds will go towards paying down debt in Arqiva’s capital structure and some of its employees will move to Cellnex. The Winchester-based company will retain its broadcast division.

Tuesday’s news comes two years after Arqiva’s owners pulled their plans to list, which at the time would have valued it at £4.5bn excluding its debt. The flotation was abandoned partly due to Arqiva’s leverage. The UK’s largest tower company refinanced, cut costs and sold off some assets, including its WiFi business, and a couple of months ago launched a review.

Cellnex, which also has sites in Spain, Italy, Netherlands, France, Switzerland and Ireland, in June bought the rights for 220 high towers from BT in the UK.

“This agreement provides both stability and a focus for our future as we concentrate on the provision of broadcast infrastructure, end-to-end networks and connectivity solutions for our TV and radio customers, international content owners, data network providers and utilities,” said Simon Beresford-Wylie, chief executive of Arqiva.

“The majority of proceeds from the sale will be used to reduce debt, thereby providing a solid financial base for Arqiva and its shareholders to invest in the future of the UK’s terrestrial TV and radio platforms as well as its data networks and capability.”

Tobías Martínez, his counterpart at Cellnex, said: “The Arqiva telecoms division acquisition is a key milestone for Cellnex. Its strong UK asset base, revenues and financial profile, combined with its long history at the heart of UK digital infrastructure, make it a perfect addition to our operations.”

Additional reporting by Nic Fildes

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