TPG Telecom inks deal to divest passive tower assets to OMERS

9 May 2022

Australia’s TPG Telecom has entered into a binding agreement to sell 100% of its passive mobile tower and rooftop infrastructure to OMERS Infrastructure Management for an enterprise value of AUD950 million (USD671 million). Announcing the deal in a press release, TPG said it expects the transaction will deliver net cash proceeds of approximately AUD890 million (being the enterprise value less total transaction costs), with the funds raised expected to be used to repay existing bank debt.

The Transaction includes a master services agreement with a 20-year term and an option for TPG Telecom to extend. Included in the deal are 1,237 passive sites, which include 428 mobile towers and 809 rooftop infrastructure elements. TPG notes that this represents approximately 21% of its total mobile network footprint, the remainder of which is already owned and operated by other tower companies. Meanwhile, the portfolio was also confirmed to include 120 sites in non-metropolitan locations at which TPG Telecom intends to decommission its active equipment conditional on regulatory approval of multi-operator core network (MOCN) agreement it struck with Telstra earlier this year.

With the transaction is subject to customary conditions precedent, including Foreign Investment Review Board approval, subject to the satisfaction of those conditions it is expected to close in the third quarter of the company’s current fiscal year (which ends 30 June 2022).

Commenting, TPG Telecom CEO and Managing Director, Inaki Berroeta, said: ‘We are delighted to have concluded the strategic review of these assets with such a strong outcome for TPG Telecom shareholders. The transaction represents competitive long-term financing, which will reduce our total financial leverage and deliver lower borrowing costs … The tower sale demonstrates the disciplined approach we are taking to asset utilisation and capital allocation as we pursue opportunities to unlock value and maximise our potential for customers and shareholders. It builds on the landmark MOCN agreement we announced in February of this year to enable regional network sharing with Telstra [subject to regulatory approval].’