TELIA COMPANY TO SELL PART OF TOWER BUSINESS

Publishing Date: Jun 30, 2021

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TELIA COMPANY TO SELL PART OF TOWER BUSINESS

PRESS RELEASE: Telia Company announces the sale of 49 percent of its tower business in Finland and Norway to Brookfield and Alecta, at a price corresponding to an enterprise value for 100 percent of EUR 1,524 million on a cash and debt free basis. The price represents an EV/EBITDA 2020 multiple of 27x.

Earlier this year, Telia Company announced its ambition to partner with external parties to further develop its digital infrastructure assets and crystalise value.

Telia is a clear leader in digital infrastructure, owning the largest tower infrastructure footprint, in the Nordics and the Baltics. We are delighted to enter into a strategic partnership with Brookfield and Alecta, to both crystallise immediate value, and more importantly help Telia better develop its infrastructure base. Both Telia and Brookfield/Alecta have a long-term industrial view on the role of tower infrastructure as a foundation for continued digitalization of the region,” says Telia Company President and CEO Allison Kirkby.

Telia Company has the largest tower infrastructure footprint in the Nordics and the Baltics, with approximately 25,000 towers and rooftop sites. In Finland and Norway, Telia’s tower business is comprised of approximately 4,700 towers with a total revenue in 2020 of EUR 88 million and an EBITDA of EUR 56 million (pre IFRS 16).

Once the transaction closes Telia Company will receive EUR 722 million for the 49 percent stake. The proceeds will be retained for deleveraging. Based on the Q1 2021 financial statements, and including the proceeds from the recently closed Telia Carrier transaction, this will result in a proforma net debt to EBITDA of around 2.1x. If, and when, there is a transfer of the tower assets from their respective business units, there will likely be a need for a review of the remaining carrying values of the business units.

Brookfield and Alecta are two of the largest owners and operators of real assets in their respective regions. Combined, they have more than USD 600 billion of assets under management, a relevant global data infrastructure platform and deep ties to the Nordic region.

The transaction is subject to customary regulatory approvals and closing is expected take place in the fourth quarter of 2021. In connection with closing of the transaction, Telia Company will enter into an anchor tenant agreement with Telia Towers in Finland and Norway, based on today’s price levels, for an initial period of 8 years, extended automatically with two extension terms of 5 years each.

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