Dutch telco KPN has sold 2,000 towers from its German subsidiary E-Plus to American Tower for €393m (US$501m).
KPN, which was advised by UBS on the transaction, said the deal gives it a book gain of €100m, and that it plans to use the proceeds for…
Dutch telco KPN has sold 2,000 towers from its German subsidiary E-Plus to American Tower for €393m (US$501m).
KPN, which was advised by UBS on the transaction, said the deal gives it a book gain of €100m, and that it plans to use the proceeds for network upgrades and to improve its debt position.
“[The sale] is in accordance with our strategy, as we do not consider the ownership and development of mobile towers to be a core part of our operations,“ KPN CFO Eric Hageman commented.
For American Tower the acquisition marks the towerco’s first steps into Europe. It already has 50,000 towers across the US, and parts of Latin America, Africa and Asia.
“Germany represents the largest wireless market in Europe and an attractive complement to our overall international portfolio mix and expansion strategy,” said American Tower CEO Jim Taiclet.
“We believe these sites represent a compelling investment for American Tower with strong day one cash flows and an opportunity to drive future collocation in a stable, growing wireless market.”
The transaction remains subject to clearance by the German Federal Ministry of Economics, which has the right to review infrastructure sales to non-EU buyers. American Tower expects the transaction to close in Q4.
The Dutch operator has sold a significant number of its towers in the Netherlands between 2008 and 2012. At the end of October it sold towers in Holland for €75m (US$97m) to Indonesian towerco Protelindo.
Wireless operator E-Plus owned around 2,500 tower sides prior to the transaction, according to the company website. .
This morning, before the announcement of the transaction, analysts at Bernstein downgraded KPN to “underperform” with a revised price target of €3.40. . “We expect 2013 EBITDA decline to accelerate to -10.8% in 2013 (10% below consensus) and FCF to -26% (20% below consensus)” Bernstein said. It added later that the E-Plus tower sale does not change the downgrade and was included in the earlier forecast already.
