IBDROOTPROJECTSIBD-LNZAPOTEC2018622491_114. Roadshow PresentationAIRE - Roadshow Presentation
Draft - 20190224 v19.pptx
Inside information in compliance with article 226 of the Consolidated Text of the Spanish
Securities Markets Law, notified to the Spanish National Securities Market Commission
Cellnex: One Further Leap Forward
Agreement to acquire Arqiva's TELECOM sites portfolio (c.8,300 sites(1))
October 8, 2019
Please see Disclaimer on page 6
(1) The Group will acquire approximately 7,400 held sites and the rights to market approximately 900 sites
IBDROOTPROJECTSIBD-LNZAPOTEC2018622491_114. Roadshow PresentationAIRE - Roadshow Presentation
Draft - 20190224 v19.pptx
Cellnex: One Further Leap Forward
Largest TowerCo in Europe with up to c.53k sites (1), out of which c.8k to be
executed through BTS programs, whilst remaining truly independent
Significant expansion of European footprint
c.53k
1,146 Sites | 8,008 Sites (1) (2) | sites (1) |
918 Sites
13,450 Sites (1)
6,118 Sites
Significant Business Risk Diversification
Revenues (Run rate (3))
TIS | ||
Other | c.85% | |
c.85% revenues | ||
c.15% | ||
from TIS | €2.1Bn | |
Adjusted EBITDA (Run rate (3))
8,832 Sites | 14,230 Sites | x | Country Ratings |
c.10% |
Cellnex vs. Peers (thousand of sites) | c.80% from countries | AAA | AA | |||||||
BBB | c.35% | |||||||||
170 | with sovereign | |||||||||
x8 | c.20% | €1.6Bn | ||||||||
53 | ||||||||||
40 | rating of at least A | |||||||||
22 | 30 | AAA | AA | |||||||
7 | A | c.15% | ||||||||
c.4% | ||||||||||
A+ | ||||||||||
Cellnex | Inwit | SBA | CC | Cellnex | AMT | c.17% | ||||
2014 (1) Up to 53k sites assuming that all sites to be transferred or built under our M&A contracts are actually transferred or built, as applicable, by each relevant date. Excluding sites not owned. (2) Including c.7,400 TIS sites acquired from Arqiva and excluding c.900 sites subject to marketing rights (3) Including future contribution from recent deals, plus contracted perimeter as of Q2 2019 (please see slide 4 of the January June 2019 results presentation). Management estimate based on 2018 revenues and Adjusted EBITDA and including run rate revenues and Adjusted EBITDA contribution under our M&A contracts signed to date, respectively, based on the assumption that all sites that may, subject to certain conditions, be transferred or built under Cellnex's acquisition agreements, purchase commitments and build-to-suit programs are actually transferred to Cellnex or built and transferred to Cellnex , as applicable, by each relevant date
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IBDROOTPROJECTSIBD-LNZAPOTEC2018622491_114. Roadshow PresentationAIRE - Roadshow Presentation
Draft - 20190224 v19.pptx
Transaction Rationale
Significantly improving our market position in the UK
Landmark transaction in a key European market with the potential to
unlock additional future opportunities
Willingness to strengthen | ||
Executing on equity story | Long-term industrial view | industrial relationship with |
Focus on core business, current customers | major MNOs in the UK | |
Attractive conditions to invest in the UK | ||
and existing markets | ||
and gain exposure to one of Europe's | Leveraging on Cellnex's operational | |
Acquiring attractive assets consisting of | ||
largest economies | excellence to benefit from secular organic | |
pure telecom sites only | ||
trends (densification, TfL (1), 5G | ||
partnerships) | ||
Improving follow-on growth
prospects
Next steps in the market already being
assessed
Significant contribution to
key financial metrics
c.8,300 sites (2), cash out of c. £2.0Bn with
an associated Adjusted EBITDA of
c.£170Mn(3) and RLFCF of c. £105Mn(3)
Fully compliant with M&A
investment criteria
Fully aligned with Cellnex's strategy and strict financial discipline, applied equally to all opportunities currently being assessed
- Transport for London process
- Approximately 7,400 held sites and the rights to market approximately 900 sites
- Expected figures in 2020
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IBDROOTPROJECTSIBD-LNZAPOTEC2018622491_114. Roadshow PresentationAIRE - Roadshow Presentation
Draft - 20190224 v19.pptx
Key Transaction Highlights
Description
Key
Financials
Closing
Funding
- Cellnex is acquiring 100% of the share capital of a company resulting from a carve-out process from Arqiva (1), consisting of c.8,300 telecom sites (approximately 7,400 held sites and the rights to market approximately 900 sites):
- Well distributed, with c.9% of the sites located in urban areas and c.91% in rural and suburban areas
- Balanced mix of towers located on the ground (c.80%) and rooftops (c.20%)
- With an initial tenancy ratio of c.1.4x
- Concessions to use street infrastructure in 14 London boroughs, in order to further build our positioning in Small Cells
- Consideration of c.£2.0Bn payable upon completion, subject to certain price adjustments (2)
- It is expected to generate an Adjusted EBITDA of c.£170Mn and RLFCF of c.£105Mn in 2020
- Majority of contracts with clients linked to CPI/RPI, with an average duration of c.10 years
- Subject to the following Conditions Precedent (among others):
- i) UK merger control clearance
- ii) No UK "public interest" intervention notice or, if issued, that the Transaction is cleared
- iii) Release of the target from Competition Commission undertakings
- iv) Completion of the reorganization and carve-out of the target business and assets
- v) Obtaining all required consents from Arqiva's finance providers in connection with the Transaction (3)
- vi) Execution of a key agreement with a key client on certain terms agreed with the seller
- Closing expected in H2 2020
- The acquisition is expected to be financed through a combination of a £2Bn syndicated loan facility (4) and available cash reserves. In addition, the Company has approved the launch of a fully-underwritten €2.5Bn Rights Issue, to support this acquisition and Cellnex's busy pipeline
- The Company is actively evaluating market opportunities for an estimated aggregate size of approximately €7Bn, being such opportunities at different stages (while there are projects in an early stage, others are being negotiated on an exclusivity basis with advanced documentation in place or even already signed, such as the present transaction)
- Arqiva Services Limited (2) The price will be adjusted, among other things: (i) if a key agreement with a key client is terminated by the latter before November 15, 2019, (ii) if another key contract is not renewed between signing and completion of the Arqiva Acquisition on similar terms as the contract currently has in terms of value, and (iii) if certain remedies are given to the United Kingdom Competition Markets Authority in order to obtain clearance of the Arqiva Acquisition. In addition, there are other price adjustments in order to account for the cash, debt and working capital position of UK Tower Business immediately before the closing of the Arqiva Acquisition. (3) including the release of the target shares and assets from the security perimeter of Arqiva's current financing arrangements (4) Cellnex has entered into a commitment and mandate letter in respect of this proposed facilities agreement
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IBDROOTPROJECTSIBD-LNZAPOTEC2018622491_114. Roadshow PresentationAIRE - Roadshow Presentation
Definitionsraft - 20190224 v19.pptx
Term | Definition |
Adjusted EBITDA | Profit from operations before D&A and after adding back certain non-recurring and non-cash items (such as advances to customers and |
prepaid expenses) | |
Adjusted EBITDA margin | Adjusted EBITDA divided by total revenues excluding elements pass-through to customers (mostly electricity) from both expenses and |
revenues | |
Build-to-suit (BTS) | Towers that are built to meet the needs of the customer |
Customer Ratio | The customer ratio relates to the average number of operators in each site. It is obtained by dividing the number of operators by the |
average number of Telecom Infrastructure Services sites in the year | |
DAS | A distributed antenna system is a network of spatially separated antenna nodes connected to a common source via a transport medium |
that provides wireless service within a geographic area or structure | |
Investments in existing tangible or intangible assets, such as investment in infrastructure, equipment and information technology | |
Maintenance Capex | systems, and are primarily linked to keeping sites in good working order, but which excludes investment in increasing the capacity of |
sites | |
PoP | Points of presence, an artificial demarcation point or interface point between communicating entities. Each tenant on a given site is |
considered a PoP | |
RLFCF | Recurring Operating Free Cash Flow plus/minus changes in working capital, plus interest received, minus interest expense paid, minus |
income tax paid, and minus minorities | |
TIS | Telecom Infrastructure Services |
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Cellnex Telecom SA published this content on 08 October 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 October 2019 06:36:01 UTC