Ontario Teachers Pension Plan (OTPP) has bought 70% of the mobile phone towers business of Spark New Zealand (NZX: SPK) for $NZ900 million ($817 million).
The deal values the total Spark TowerCo business at $NZ1.175 billion.
The sale price, which is marginally above analysts’ expectations, represents a pro-forma enterprise multiple of about 33.8 times forecast EBITDA for the 2023 financial year. This is above the multiple in stakes in mobile phone tower portfolios recently sold in Australia by Telstra (ASX: TLS) and TPG Telecom (ASX: TPG).
TowerCo holds 1,263 tower sites. As part of the deal, OTPP has agreed to add a further 670 tower sites over the next 10 years. Spark will have rights to use the existing and new sites for 15 years plus right of renewal.
The transaction is still subject to approval by New Zealand’s Overseas Investment Office but the parties expect it to close by the end of the year.
OTPP head of Asia Pacific infrastructure Bruce Crane said the investment was an ideal fit for the defined benefit fund.
“This investment builds on our long track record of investing in superior businesses in New Zealand and will draw on our deep experience investing in digital infrastructure businesses globally,” he said.
Spark chief executive Jolie Hodson said the company was pleased to have formed a strategic partnership with OTPP. She said OTPP was “a high-calibre investor with a long-term partnering focus and significant experience managing a portfolio of infrastructure investments globally, including within Australia and New Zealand”.
OTPP’s investments in New Zealand include the Abano Healthcare Group and Asia Pacific Healthcare Group, as well as a large portfolio of timberland assets.
Telstra sold a 49% stake in its mobile phone towers infrastructure business to The Future Fund, Sunsuper (now part of Australian Retirement Trust), and Commonwealth Superannuation Corporation for $2.89 billion in mid-2021.
TPG Telecom sold 100% of its mobile phone towers infrastructure business to Ontario Municipal Employees Retirement Scheme (OMERS) for $950 million in May. In June, OMERS announced it had also acquired independent developer and operator of mobile phone towers Stilmark for an undisclosed price.