Paying A$1.9 billion (US$1.37 billion), AustralianSuper – which is Australia’s largest pension fund – has taken a controlling stake in Australia Tower Network (ATN), owned by Singtel but which operates towers for its subsidiary, Optus.
The network of more than 2,300 national tower and rooftop sites will provide long-term contracted revenues for AustralianSuper and builds on the Fund’s strong interest in investing in long-term national infrastructure assets.
Following the industry trend for tower divestments, Singtel meanwhile, will use the funds to support its 5G plans.
AustralianSuper head of infrastructure, Nik Kemp said: “This is an opportunity that will allow AustralianSuper to build its investments in the digital infrastructure sector in partnership with Singtel, an established global telecommunications leader.”
“ATN is a high-quality infrastructure asset that exhibits many of the characteristics we believe will drive long-term value creation – its scale and reach are difficult to replicate and it has a high proportion of long-term contracted revenues. Importantly, not only is it leveraging the growing demand for digital services, but it also has strong embedded growth opportunities.”
Under the terms of the acquisition, ATN has entered into a 20-year contract with Optus, with options to extend. Optus has also committed to 565 development sites that ATN will deliver over the short to medium term.
Kemp added: “ATN has a clear strategy to expand its footprint and customer base. It also has a development pipeline of new contracted sites and a strategy to service other carriers seeking to expand their capacity. As a long-term investor, we see the opportunity to realise significant value from the execution of this growth plan.”
The $1.9 billion price tag includes $900 million to be paid by AustralianSuper Infra; $500 million as a return of capital by ATN to Singtel; and $500 million as repayment of outstanding loans by ATN to Optus. It means Singtel’s net gain stands at $400 million.
The conditional agreement is expected to result in a completed sale by the end of October.
As Capacity reported late last year, AustralianSuper is a major driver of the trend for pension funds and PE investors looking to ICT infrastructure investments.
Earlier this year AustralianSuper joined forces with Stonepeak to purchase Lumen's Latin American network. Last year, Bloomberg named AustralianSuper as one of the consortium members looking to purchase GTT Communications’ Apollo infrastructure operations. Other members included Australian bank Macquarie and UK investor 3i.
