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  • 29 Sep 2016
  • ·
  • M&A

Cellnex Telecom enters into an agreement to acquire Shere Group Limited

The agreement reached with funds managed by Arcus infrastructure Partners and minority shareholders involves the acquisition of 100% of Shere Group Limited, adding 1,004 sites to Cellnex Telecom’s portfolio

  • With this € 393 million transaction Cellnex is expanding and consolidating its presence in Europe and bringing the UK into the Group’s activities. The integration of Shere in the Netherlands has trebled the number of sites.
  • The agreement, which is expected to be closed during October, confirms the model of a neutral telecommunications infrastructure operator with the capacity to service a wide range of data and mobile telecom operators working in different countries.
  • Cellnex will incorporate 464 sites in the Netherlands, bringing the number of sites operated in the country to 725. Cellnex will own 540 sites in the UK, the fifth European country in which the company will be present and operate.
  • Integrating Shere’s assets will provide estimated annualised revenues of € 29 million: 2/3 in Netherlands and 1/3 in the UK.
  • The acquisition will be financed with available funds.
  • Cellnex has undertaken a series of growth investments in Europe over the past two years, to the tune of approximately € 1.4 billion. This means that at present almost 40% of company revenues are generated outside Spain.

Barcelona, 29 September 2016. Cellnex Telecom has reached an agreement to acquire 100% of Shere Group Limited (“Shere”), a group managing sites in the Netherlands and the UK and is controlled by funds managed by Arcus Infrastructure Partners. The operation, comprising an investment of € 393 million, involves acquiring the portfolio of 1,004 mobile telecom sites operated by Shere.

Cellnex Telecom President Francisco Reynés underlined that “the agreement is consistent with our initial implementation strategy of executing small transactions followed up with consolidation in the markets in which Cellnex is primarily focused in Europe. The efforts made by the Cellnex team over the last 18 months have led to this new transaction in the Netherlands and the UK, consistent with our model as an independent telecommunications infrastructure operator.”

Meanwhile, Cellnex CEO Tobías Martínez observed that the acquisition of Shere “bolsters Cellnex both in terms of expansion and the diversification of our customer base, which already includes a majority of the key European operators, as well as the expansion and diversification of our geographical base. In terms of figures, Cellnex will now generate 40% of its revenue outside Spain and, once we complete the acquisition of Shere, will have a backlog (contracted sales for the coming years) of € 8.4 billion.”

The 464 sites that Shere operates in the Netherlands are spread evenly throughout the country. They also complement the network of 261 sites that Cellnex already manages, without duplication. The tenancy ratio of the infrastructures located in Shere Group’s sites in the Netherlands stands at 2.7x.

The 540 sites located in the UK are concentrated mainly in England and Wales. The tenancy ratio of those sites is 1.6x.

According to Tobías Martínez: “With the UK we are not only bringing on board a new European country, further bolstering the geographical continuity of the markets in which we operate, but we are entering a particularly significant and dynamic market for the infrastructure operator sector since the management of these sites involves a high degree of outsourcing.”

The Dutch market

The Dutch mobile telecom infrastructure market comprises 15,200 sites, of which Cellnex will, following completion of the present transaction, manage 725 sites.

The Netherlands – with its AAA rating – is one of Europe’s countries with the greatest penetration of 4G mobile broadband.  This coverage of the four mobile operators in the country ranges from 92% to 99%.  This roll-out was achieved mainly on the basis of the existing 2G and 3G sites. As in most European countries, improving coverage to allow mobile access to broadband content in areas with large numbers of concurrent users is one of the challenges for the future. In this regard, rolling out a higher density and more capillary network by deploying small cells and distributed antenna systems (DAS) will constitute a growth vector in the Dutch market over the coming years.

The UK market

The UK has a total of 46,000 sites, around 21% of which are run by independent operators such as Shere or Arqiva, and by two joint ventures – MBNL (comprising Three and EE) and CTIL (Vodafone and O2).

The data traffic segment is growing fast, just as it is right across Europe. Year-on-year growth of 49% is estimated up to 2020, in comparison to the stability in the voice services sector. The country has very broad 3G coverage while LTE technologies (e.g. 4G) still have some way to go. Operators have begun to roll out small cells, the antenna arrays which in future should ensure the quality of mobile broadband in line with increased data consumption. Also in the UK, as in all other European countries, these roll-outs are a growth vector for infrastructure operators.

 

About Cellnex Telecom

Cellnex is Europe’s leading independent mobile telecommunications infrastructure operator, with a total portfolio of over 16,600 sites. Cellnex closed the first half of 2016 with revenue of € 338 million (up 18%) and EBITDA of € 134 million (up 16.5%). Cellnex is present in Italy, Spain, France, Netherlands and now the UK.

Cellnex classifies its activities into three areas: mobile telecom infrastructures; broadcasting networks; security and emergency service networks and solutions for smart urban infrastructure and services management (smart cities and the Internet of Things (IoT)).

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