Mobile telecoms companies selling their tower assets has been a big theme over the last few months, with the most recent being United Group, which is owned by BC Partners. I speak to BC’s chairman of Europe Nikos Stathopoulos about the sale, how its valuation matched up with other deals over the last year, and his further plans for United Group.
Next up, we look at private equity firms Providence Equity Partners and Searchlight Capital Partners upping their take-private offer for a UK-based conference company, before we finish with the first acquisition by BPEA EQT – and a call-back to when we spoke to EQT CEO Christian Sinding about the formation of that Asia-based firm.
Towering valuations
First up today, we have a deep dive into BC Partners’ sale of the mobile tower assets of United Group, a telecoms company headquartered in the Netherlands but operating in southeast Europe.
Nikos Stathopoulos, BC’s chairman of Europe, talked to us about some of the headwinds that mean the sale couldn’t quite attract the valuations of other similar deals a few months ago – such as Vodafone’s agreement to sell a large stake in Vantage Towers or Deutsche Telekom’s partial exit from GD Towers – but that the 20.1x multiple was still “very attractive”.
“Tower companies may have traded slightly higher than 20x in the past, but inflation rates and interest rates have had an impact,” said Stathopoulos. “But the fact it was still able to get that multiple is a testament to the quality of tenant that United Group is going to be.”
“You end up having a 20-year relationship with the buyer,” said Stathopoulos. “It’s very important to legislate for that kind of relationship – how will the rent change, the maintenance, who’s responsible, there’s a lot of elements coming into this you need to negotiate. That’s why it’s never a traditional transaction like buying and selling an asset.”
There were “a lot of interested parties” in forming that relationship, said Stathopoulos, via the Goldman Sachs-run auction.
“We narrowed down the field to less than a handful during the second round, and Tawal ended up being the winning bid both because of its strategic nature as a group and also as it was the highest bidder,” he said. “They were there for day one but were not alone. There were some infra funds, some strategies backed by PE, interest from Phoenix International, Blackstone, groups like Actis, which is an infra fund. We had interest from a couple of others.”
The eventual winner was Tawal, an ICT infrastructure provider in MENA and based in Riyadh, Saudi Arabia.
Check out the full interview to read about BC Partners’ next plans for United Group.
Upped offer
Switching to take-privates, and private equity firms Providence Equity Partners and Searchlight Capital Partners have amended their offer for Hyve, a UK-based organiser of international exhibitions and conferences. The move came after reports that some shareholders felt the previous offer undervalued the company.
The final recommended cash offer is for 121p per share, which would value the total share capital of the firm at £363 million ($454 million; €410 million) and £524 million on an enterprise value basis.
The offer gives an enterprise value multiple of around 22.1x Hyve’s EBITDA for the 12 months to 30 September. It also offers a premium of 57.8 percent to Hyve’s closing share price on 17 February, just before the take-private interest was announced. It offers a premium of 67.4 percent of over the three-month average to that date, 78.7 percent over the six-month average and 40.7 percent over the price on 20 February, the last business day before the offer period began.
The previous recommended cash offer was 108p, made when Providence was bidding alone. Searchlight joined the offer in early April. Some shareholders were reported to believe the offer undervalued the company, however.
Providence and Searchlight said that they had received irrevocable undertakings that amounted to around 28.5 percent of Hyve’s outstanding shares.
Opening deal
Our colleagues in the US over at PE Hub took a look at BPEA EQT announcing a $1.25 billion acquisition of IMG Academy, a Bradenton, Florida-based provider of sports education services, from Endeavor Group Holdings.
It was the first investment since BPEA EQT was formed in October 2022 in a deal between EQT and Baring Private Equity Asia.
We spoke to Christian Sinding, EQT CEO, at the time about his plans for the new firm and the motivations behind the deal. You can check that interview out here.
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