Macquarie fires starting gun on $4bn-plus sale of Axicom

The Macquarie-backed telecommunications tower owner Axicom has launched its sales process. Picture: Marc Stapelberg

The Macquarie-backed telecommunications tower owner Axicom has launched its sales process with promotional material sent out to the market on Wednesday.

Prospective buyers for the $4bn-plus business are being told that it generates more than $150m of annual earnings before interest, tax, depreciation and amortisation.

Axicom has more than 2000 sites, with 80 per cent in strategic metropolitan locations around Australia and is the country’s largest independent owner of mobile communications infrastructure.

Its main customers are mobile network operators Telstra, Optus and Vodafone Australia, and its towers provide communications infrastructure for the vast majority of mobile device users nationally.

Axicom also provides services for NBN, emergency services and various state and federal government agencies, and wireless and broadband data service providers, and it designs, builds, maintains and manages towers.

The flyer document being sent to prospective buyers outlines how Axicom has profit margins between 60 per cent and 70 per cent and it typically has 2.4 tenants per site, with the largest customer generating about 40 per cent of revenue.

The flyer also describes how the portfolio has a weighted average lease expiry of about 18 years.

Working on the sale are Macquarie Capital and law firm G+T.

DataRoom first revealed plans in September for the sale that was triggered by interest from groups bidding for the recent Optus telecommunications tower portfolio sale.

Axicom is the old Crown Castle business, purchased for $2bn in 2005 by a consortium led by Macquarie Infrastructure and Real Assets from the US-based Crown Castle International.

Other consortium members were Unisuper and the UBS International Infrastructure Fund II.

Telecoms towers are in demand from infrastructure investors, eager to find opportunities to gain stable returns in a low interest rate environment.

In October, a 70 per cent stake in the Optus portfolio was purchased by AustralianSuper for $1.9bn in what was a price that equated to 38 times its earnings before interest, tax, depreciation and amortisation up front or 28 times following a development program.

Axicom dropped out of the contest as it faced approaches from rivals.

Telstra in June offloaded a 49 per cent interest in its telco towers to Morrison & Co and The Future Fund for 28 times EBITDA.

Based on that earnings multiple, Axicom could sell for about $4.2bn.

Also set to put tower assets up for sale are TPG Telecom, which has hired Bank of America for a process, and telco Spark, which is listed in New Zealand.

Other bidders in the Optus contest included Ontario Teachers’ Pension Plan and the Queensland Investment Corporation, Brookfield, and Canada-based OMERS Infrastructure, with ATN International, which will all no doubt show keen interest in Axicom along with AutralianSuper.