US towerco Crown Castle has exited Australia after agreeing to sell its 1,800 sites in the country to a consortium led by Macquarie’s infrastructure fund arm for A$2bn (US$1.6bn).
Crown Castle confirmed it was exploring the sale of the Australian…
US towerco Crown Castle has exited Australia after agreeing to sell its 1,800 sites in the country to a consortium led by Macquarie’s infrastructure fund arm for A$2bn (US$1.6bn).
Crown Castle confirmed it was exploring the sale of the Australian unit (CCAL) in February “in light of recent unsolicited offers”. The Houston, Texas-based group said it will use proceeds from the sale to finance the US$1bn acquisition of fibre operator Sunesys it announced late last month.
Asset manager Macquarie Infrastructure and Real Assets (MIRA) led the acquisition alongside a number of other investors that have not been disclosed. MIRA owns tower assets in other markets but this is its first purchase of sites in Australia. Its current and former investments in telecoms infrastructure include Arqiva in the UK, GTP and Viom Networks in the US, Taiwan Broadband Communications, Broadcast Australia and Mexico Tower Partners. MIRA manages US$105bn of assets worldwide through more than 50 public and private funds.
Ben Moreland, Crown Castle’s president and CEO, was happy to sell MIRA the business.
“While CCAL has been a great contributor to our business, our decision to divest this business is opportunistic and allows us to re-allocate capital to growth-enhancing initiatives in the US market, which we believe is the most attractive wireless market in the world for wireless investment,” Moreland said.
He added that Crown Castle would be able to redeploy capital towards its growing small cell networks which he expects “will be accretive to our long-term AFFO and dividend per share growth rates”.
Moreland continued: “We believe we are in the early stages of small cells deployment and are excited by the opportunities that we see ahead of us.”
Wells Fargo sell-side analyst Jennifer Fritzsche backed the sale. In a note to investors she said: “We believe 17.4x LTM EBITDA is an attractive multiple – slightly better than rumoured price talk of US$1.5bn – and in line with the mid-to-high teens we have seen in other recent global transactions.”
CCAL was formed in 2000 and is the largest independent towerco in Australia. Crown Castle owns 77.6% of the business and expected it to contribute between US$97m to US$102m to its projected total adjusted EBITDA of roughly US$2.15bn.
Crown Castle expects to receive net proceeds of US$1.3bn from the disposal, after accounting for its ownership interest, repayment of inter-company debt owed to it by CCAL, and estimated transaction fees and expenses.
Morgan Stanley and Credit Suisse ran the sale according to a report in the Australian Financial Review.
