The Future Fund and Morrison & Co have reached an agreement for an Australasian consortium to acquire 49 per cent of InfraCo Towers from Telstra Ltd, which represents the largest network of mobile tower sites in Australia.
The consortium comprises the Future Fund as its largest investor, Sunsuper and the Commonwealth Superannuation Corporation (CSC), and is managed by Morrison & Co.
Telstra InfraCo Towers owns and operates approximately 8,200 tower assets including over 5,500 mobile towers supporting critical digital infrastructure throughout Australia.
The transaction values the business at AUD5.9 billion, recognising the significant strategic value of the high-quality, well-located assets, with the transaction expected to complete in Q3 2021.
Dr Raphael Arndt, CEO of the Future Fund, says: “We are a large investor in Australian infrastructure which plays an important role in our portfolio. This investment further strengthens our exposure to digital infrastructure and the long-term thematic of data growth. We are pleased to partner with Telstra to play an important role in strengthening Australia’s 5G infrastructure. The long-term growth potential and defensive cash flow profile of this investment is a valuable fit with our focus on diversification across the portfolio.”
Marko Bogoievski, CEO of Morrison & Co, says: “We are pleased to have supported the consortium to secure this investment in essential mobile connectivity for local communities across the country. Telstra InfraCo Towers should deliver consistent long-term returns for our investors, supported by strong data growth and rising consumer and enterprise demand for mobile capacity and coverage. We see future opportunities to develop both greenfield and in-situ assets, including 5G network deployments, to provide efficient and reliable access for all customers.”
Andrew Penn, CEO of Telstra, says: “We are delighted to be forming a long-term strategic partnership with such high quality Australian institutions. Telstra InfraCo Towers’ assets are amongst the most strategic critical infrastructure assets in Australia and support Telstra’s world leading mobile network. The increased commercial focus on Towers since its establishment as a standalone business within Telstra is already delivering efficiencies and we look forward to working with Morrison & Co and the consortium partners to sustain its market leadership over the long term, through investment in new infrastructure and services, availability of competitive market offerings and leverage of new technology to improve speed and efficiency.”
CSC’s CIO, Alison Tarditi, says: “Our investment in Telstra InfraCo Towers enables us to provide our customers with high-quality, inflation-linked cash flows and capital growth generated through the provision of essential infrastructure to an increasingly digital economy. These assets complement our existing digital infrastructure investments, including Australian data centres, as CSC was an early mover into opportunities to provide the infrastructure of the future.”
Michael Weaver, Head of Private Markets at Sunsuper, says: “This partnership will provide a strong, defensive investment opportunity for our members, in a sector exhibiting positive momentum. The Telstra InfraCo Towers business delivers an essential service to many of our members, including those in rural and regional areas, and we look forward to working with our partners to maintain its market- leading position.”
Telstra will retain a 51 per cent holding in the business and has entered into long-term service agreements with InfraCo Towers to secure continued access to services that will support their market leading presence in mobile and data services.
“Our consortium is looking forward to partnering with Telstra to support their growth ambitions. We are pleased to have unlocked this transaction by presenting Telstra with a compelling strategic proposition that recognises the value of their high quality network infrastructure assets,” says Will Smales, Global Head of Private Markets at Morrison & Co.