3i Infrastructure sells Wireless Infrastructure stake – 3i Infrastructure has agreed to sell its 93% stake in Wireless Infrastructure Group (“WIG”), the independent wireless infrastructure operator headquartered in the UK, to Brookfield Infrastructure.
The sale values the company’s stake in WIG at approximately GBP387 million, compared to a valuation of GBP291 million at 30 September 2019. This equates to an enterprise value for WIG of GBP575 million, and will result in a 27% gross IRR and a 1.7x gross money multiple for 3i Infrastructure. Completion of the transaction is expected to follow very shortly, with approximately half of the proceeds payable immediately, a quarter payable unconditionally in 12 months and a quarter payable unconditionally in 24 months.
3i Infrastructure invested GBP75 million to acquire a minority interest in WIG in April 2016 to support the growth of the business. In January 2018, 3i Infrastructure invested a further GBP187 million to increase its equity ownership to 93%. WIG builds and operates communications towers in rural and suburban areas, together with neutral host networks to enable mobile coverage in buildings and on city streets. WIG is an independent operator and invests in high capacity infrastructure that is made available to all networks.
Over the past three years WIG has achieved significant growth and has become a leading provider of indoor mobile infrastructure to buildings right across the UK. Under the Company’s ownership, WIG has also grown its international footprint through the development of its Dutch and Irish tower portfolios, while supporting its mobile customers in the UK through delivery of 4G rollout, new tower builds, and bolt-on tower portfolios.
Following completion of this sale and of the sale of 3i Infrastructure’s UK operational projects portfolio, announced on 6 December 2019, the updated pro forma cash position of the company will be approximately GBP390 million. The investment manager continues to work on a range of potential new investment opportunities and will assess carefully the appropriate level of cash to maintain as the deal pipeline evolves.
Phil White, managing partner and head of infrastructure, 3i Investments, the investment manager said: “This sale arises unexpectedly but in the context of a changing competitive landscape in the UK mobile towers sector where scale is increasing in importance, with a number of potential tower portfolio transactions anticipated to take place next year. In the process of preparing to position WIG for such a transaction, we received a compelling offer from Brookfield Infrastructure which, after careful consideration, we decided to accept. We concluded that it is better for shareholders that we sell our interest in WIG at this attractive price and look to recycle the capital into new opportunities.”
[3i Infrastructure’s impressive run of disposals continues. The £96m uplift in the valuation of WIG adds about 10.8p to the NAV.]
3IN : 3i Infrastructure sells Wireless Infrastructure stake