Telefónica agreed to sell Telxius Towers to American Tower Corporation for approximately €7.7 billion (approximately $9.4 billion at current foreign exchange rates), subject to customary closing adjustments.
The deal consists of approximately 31,000 existing communications sites in Germany, Spain, Brazil, Chile, Peru and Argentina. In addition, American Tower expects to spend approximately $500 million to construct a committed pipeline of approximately 3,300 new sites in Germany and Brazil through 2025.
Following this operation, American Tower becomes Telefónica’s leading supplier in both Europe and Latin America and maintains its status as a partner in strategic projects in Brazil, Argentina and Colombia.
Tom Bartlett, American Tower’s Chief Executive Officer stated, “This transaction is transformational for our European business and will establish American Tower as one of the largest independent communications infrastructure providers in Europe. It is also complementary for our Latin American portfolio and positions us to drive strong long-term organic growth across both regions while augmenting our new build programs and enhancing our relationships with key tenants. We are excited to broaden our partnership with Telefónica by acquiring a high-quality, well-located portfolio of sites that will further diversify our global footprint and enhance our ability to help provide broadband connectivity for billions of people.”
American Tower expects the assets to generate approximately $775 million in property revenue, approximately $410 million in gross margin, and approximately $390 million in Adjusted EBITDA at current foreign exchange rates, in their first full year in its portfolio, pro forma for contributions from the committed future build-to-suits. This implies an Enterprise Value / Adjusted EBITDA multiple of less than 26x.
The President of Telefónica, José María Álvarez-Pallete, said that “this is a deal that makes strategic sense within our roadmap. American Towers was our second supplier after Telxius”. He added that “after this great operation we will continue to focus on our most ambitious objectives: the integration of O2 with Virgin in the United Kingdom, the purchase of Oi mobile in Brazil and the reduction of debt”.
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