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Blackstone Infrastructure Partners Acquires Stake in Phoenix Tower International

Funds managed by Blackstone Infrastructure Partners have purchased from Manulife Investment Management a 35 percent stake in Phoenix Tower International (PTI), a private cell tower platform in the Americas and Europe, Blackstone said. PTI has its headquarters in Boca Raton, Florida.

“Founded in 2013, Phoenix Tower International operates over 14,000 cell towers across 18 countries,” a statement from Blackstone reads. “PTI owns and operates high-quality wireless infrastructure sites in markets experiencing strong wireless usage growth around the world. PTI’s expansion is focused throughout the Americas and Europe.”

Besides funds managed by Blackstone, PTI’s investors include members of its management team.

Commenting on the announcement, Greg Blank, senior managing director in Blackstone’s infrastructure business, said, “Cell towers represent one of the highest-quality and most durable infrastructure asset classes given their mission-critical nature and long-term growth tailwinds.”

Blanks said that that Blackstone would support PTI’s growth and expansion by using Blackstone’s size and resources.

The CEO of Phoenix Tower International, Dagan Kasavana, said that there is a massive growth opportunity in the wireless infrastructure sector worldwide.

Recep Kendircioglu, head of infrastructure investments at Manulife Investment Management, said that Manulife’s investment in PTI supported its goal to expand digital connectivity globally.

“Together with the PTI team, we achieved a great outcome,” Kendircioglu said.

Blackstone said its investment in Phoenix Tower International is the most recent example of its digital infrastructure platform investments. Digital Infrastructure, which enables mobile connectivity and cloud-based computing for the businesses advancing the economy, has long been an area of focus for Blackstone, with COVID-19 accelerating the sector’s growth and required investment, the company said. Most recently, Blackstone invested in QTS, a data center company, and Hotwire, a provider of fiber-to-the-home in the United States, the company said.

According to Blackstone, it is the world’s largest alternative asset manager.

“We seek to create positive economic impact and long-term value for our investors, the companies we invest in and the communities in which we work,” the company statement reads. “We do this by using extraordinary people and flexible capital to help companies solve problems. Our $731 billion in assets under management include investment vehicles focused on private equity, real estate, public debt and equity, infrastructure, life sciences, growth equity, opportunistic, non-investment grade credit, real assets and secondary funds, all on a global basis.”

Phoenix Tower International Gains Tower Sites in French West Indies

Under terms of an exclusivity agreement with Outremer Telecom, Phoenix Tower International would acquire 203 wireless towers, together with wireless towers to be constructed during the next 10 years in the French West Indies through a build-to-suit program, according to a statement from Phoenix Tower International. If concluded, the transaction would expand and solidify Phoenix Tower International’s position as the largest tower infrastructure provider in the market with more than 437 towers and would grow its footprint across Europe and the Caribbean, the statement reads. Subject to what Phoenix Tower International said were customary conditions for this type of transaction, the agreement would result in the two companies’ establishing a long-term collaboration in which Outremer Telecom would occupy the sites for at least 20 years.

Dagan Kasavana, CEO of Phoenix Tower International.

“With this transaction, Phoenix Tower International would continue to expand its presence across European territories and its disciplined investment strategy,” said Dagan Kasavana, the company’s CEO. “The increased presence of Phoenix Tower International, a neutral-host independent tower company, in the region would facilitate increased coverage expansion for all wireless operators and ultimately enhanced connectivity for the population of French West Indies. Phoenix Tower International is proud to be working with the mobile network operators across the world and is pleased to have entered into advanced discussions with the Altice Group on this transaction.”

Mathieu Cocq, CEO of Outremer Telecom, expressed enthusiasm about creating a new tower partnership in the French West Indies.

“Phoenix Tower International would be a long-term partner of the highest quality who shares our vision to invest in leading infrastructure,” he said.

Through its subsidiaries, Phoenix Tower International owns and operates more than 14,000 towers, 986 kilometers of fiber and more than 80,000 other wireless infrastructure and related sites in Europe, the United States, Latin America and the Caribbean, the statement from the company reads. It said that Phoenix Tower International was founded in 2013 with a mission to be a premier site provider to wireless operators across the Americas in high-growth markets. According to the company, its investors include funds managed by Blackstone Tactical Opportunities and John Hancock, as well as members of the management team.

“Outremer Telecom provides integrated fixed telephony, mobile telephony and internet access services for residential and business customers in Martinique, Guadeloupe and French Guiana,” the Phoenix Telecom International statement reads. “Created in 1986 under the name Infotel, the group was renamed with its current name in 2000. The group was listed on the Paris stock exchange in 2007. The Altice group acquired Outremer Telecom in 2013. Following the acquisition of SFR by Altice, Outremer Telecom now operates under the SFR brand.”

Phoenix Tower International Closes Multi-jurisdiction HoldCo Financing Facility with CDPQ and AMP Capital

Phoenix Tower International (PTI) has closed a HoldCo financing facility to continue its international expansion. The transaction consists of three tranches at close that may be further increased through an accordion feature up to a total of EUR 775 million (approx. $940 million) to fund future growth. Caisse de dépôt et placement du Québec (CDPQ), a global investment group, and AMP Capital, a global investment manager, provided the financing.

The multi-jurisdiction facility underpins PTI’s focus providing infrastructure assets worldwide. PTI will use facility to fund its recent growth in Europe and provides additional capacity to support growth in existing and new markets, according to information provided by the company.

“This financing provides PTI with the flexibility to continue to grow our business across all markets with incremental financing available at our disposal, and will allow us to deliver for our customers, counterparties and business partners in an expedited manner with a strong lender group,” said Dagan Kasavana, CEO of PTI, in a prepared statement. “CDPQ and AMP Capital’s financing will support PTI as we continue to construct and invest in digital infrastructure across all markets and lead the necessary 4G and 5G build-outs on behalf of our customers and the populations we serve around the world,”.

Thomas Senecal of Blackstone Tactical Opportunities said that PTI’s focus on offering value-add infrastructure solutions to carrier customers is representative of Blackstone’s thematic focus on digital infrastructure and wireless connectivity. “We are proud to partner with CDPQ, a long-term partner to Blackstone, and AMP Capital to support our expansion across the US, Europe, and other growth markets,” he said.

Marc Cormier, executive vice president and head of fixed income at CDPQ, said that the financing in PTI builds on CDPQ’s previous experience to contribute to the expansion of digital infrastructure globally, alongside recognized industry leaders in the fast-growing sector. “By providing a customized and flexible financing solution to PTI, CDPQ is supporting a high-quality operator well positioned to seize opportunities in attractive markets that are experiencing a rising demand for connectivity,” he said.

Patrick Trears, global head of infrastructure debt at AMP Capital, said that PTI is one of the leading global owners and operators of tower infrastructure and that AMP Capital is pleased to have collaborated with PTI and CDPQ to implement a highly bespoke financing to support their growth ambitions.

“With the demand for telecommunication infrastructure set to continue to increase, we believe that PTI is well-placed to assist in meeting this demand and capitalize on associated growth opportunities across their markets,” Trears said. “Telecommunications infrastructure remains a key sector for our infrastructure debt strategy, and with this transaction we are pleased to have added another high-quality investment for our investors around the world.”

PTI was represented by Locke Lord. CDPQ and AMP Capital were represented by Norton Rose Fulbright. Terms of the transaction remain confidential among the parties.

Companies

PTI owns and operates over 12,500 towers, 986 km of fiber and markets over 80,000 other wireless infrastructure and related sites located in 16 countries throughout Europe, the United States, Latin America and the Caribbean.

PTI was founded in 2013 with a mission to be a premier site provider to wireless operators across the Americas in high-growth markets. PTI’s investors include funds managed by Blackstone Tactical Opportunities and John Hancock, as well as various members of the management team.

CDPQ invests to generate sustainable returns over the long term. As a global investment group managing funds for public retirement and insurance plans, CDPQ works alongside its partners to build enterprises that drive performance and progress. The company is active in financial markets, private equity, infrastructure, real estate and private debt. As of Dec. 31, 2020, CDPQ’s net assets were CAD $365.5 billion.

AMP Capital is a global investment manager with a heritage and strength in real estate and infrastructure, and experience in fixed income, equities and multi-asset solutions. AMP Capital has been investing in infrastructure since 1988 and has $22 billion infrastructure equity and debt assets under management as of Dec. 31, 2020. AMP Capital has been ranked in the top 10 infrastructure managers globally, based on total capital raised. AMP Capital is owned by AMP Limited, which was established in 1849, and is one of Australia’s largest retail and corporate pension providers.

Source: Phoenix Tower International

Phoenix Tower International Expands in South America Buying 600 Towers in Bolivia

In its latest acquisition in South America, Phoenix Tower International has executed a sale and leaseback transaction for 600 wireless towers from Nuevatel, a carrier in Bolivia. Terms of the transaction remained confidential between the parties.

“We are pleased to transact with Nuevatel to purchase these assets and bring the independent tower model to Bolivia,” PTI CEO, Dagan Kasavana, said in prepared text. “We believe our presence in the market will provide carriers with a strong neutral host solution for their growing infrastructure needs.  Furthermore, the management team of Trilogy are long term wireless veterans that we are excited to partner with and support in the coming years.”

Choate Hall & Stewart LLP and Harrison & Harrison acted as legal advisors to PTI. Nuevatel was represented in the transaction by Lape Mansfield Nakasian and Gibson, LLC.

PTI also reached an agreement this week with Uniti Group to acquire the ownership rights relating to more than 500 wireless tower sites in Mexico, Colombia and Nicaragua. Terms of the transaction remain confidential between the parties. (see related story)

Uniti Group Sheds Latin American Towers After Windstream Court Judgement

By J. Sharpe Smith, Senior Editor

On the heels of a major court judgement against its key customer Windstream, Uniti Group has sold its Latin American towers to Phoenix Tower International for $100 million in cash. The sale comprised 500 towers located across Mexico, Colombia and Nicaragua. Uniti’s stock, which went down 37 percent yesterday, rose 5.2 percent in early trading but closed down nearly 2 percent today.

Kenny Gunderman, president and CEO of Uniti, said, “This transaction realizes substantial value for our stockholders and allows us to focus on the vast communications infrastructure growth opportunities in the United States. Uniti Towers will continue to be a significant component of our ongoing strategy to provide a full suite of solutions to wireless carriers and other customers.”

The transaction with PTI is subject to customary closing conditions and is expected to close by March 31, 2019. Citi served as exclusive financial advisor to Uniti in connection with this transaction.

The tower sale comes on the heels of a $310 million judgement against Windstream Holdings, one of Uniti Group’s largest customers.

U.S. District Court of the Southern District of New York ruled in favor or Aurelius Capital Management, a hedge fund that had accused Windstream of violating the covenants of its bonds when it sold and leased back its assets to CS&L (now Uniti).

As a result of the judgement, which will be appealed, Aurelius will be awarded $310.5 million.

“This move has not only thrown serious doubt into whether or not Windstream can survive, but has also created real worries for Uniti even as the company continues to diversify away from its former parent,” wrote Daniel Jones, Crude Value Insights.

Wells Fargo Securities focused on the impact of the judgement on Uniti Group, because Windstream’s lease payment represents 69 percent of Uniti’s revenue.

“In our view, [Windstream’s lease payment] clearly will not happen given Friday’s ruling. As of Sept. 30, 2018, [Uniti] had ~$330 million in total liquidity,” wrote Jennifer Fritzsche, Wells Fargo senior analyst. “Recall from our downgrade of the shares in mid-January, based on our math, we did not see a simple path for Uniti to fund its ~$430 million annual dividend from its own internally generated cash flow. This task gets a lot more complicated in the wake of Friday’s ruling.”

Aurelius, which owns a majority of Windstream’s 6.375 percent 2023 Senior Notes, said in a prepared statement, “We take no pleasure in Windstream’s resulting financial predicament. Windstream could easily have averted it – first by not playing fast and loose with its noteholders in 2015, hoping nobody would hold the company to account, and second by settling.”

Uniti Group owns about 600 to 1,000 towers, but it is not a large percentage of its business. Nevertheless, the number of towers would make it a mid-sized tower company if it were purely a tower company.

As part of the sale/lease back, which was completed in 2015, a wholly-owned subsidiary of Windstream contributed telecom assets in exchange for stock in CS&L (now Uniti), $1.035 billion, and $2.5 billion in debt. The deal brought Uniti onto the market as a REIT.

“The objective of this move was to create a tax-advantaged vehicle known as a REIT through which investors could receive preferential tax treatment on earnings so long as those earnings are passed on to shareholders in the form of distributions,” wrote Jones.