New Zealand's Spark to sell 70% stake in towers business for NZ$900M

Spark New Zealand Ltd. will sell a 70% interest in its TowerCo business to the Ontario Teachers' Pension Plan Board for expected net cash proceeds of NZ$900 million.

The agreement values TowerCo, which manages approximately 1,263 sites, at about NZ$1.18 billion, including an assumed fiscal 2023 EBITDA of NZ$34.8 million as of June 30, 2023, Spark said in a July 12 news release.

As part of the transaction, Spark struck a 15-year deal with TowerCo to gain access and rights of renewal to existing and new towers. The deal involves a commitment to build 670 additional sites over the next 10 years.

The transaction's completion is expected in the first half of fiscal 2023, subject to approval by New Zealand's Overseas Investment Office.

Spark will keep a 30% stake in TowerCo and become the anchor tenant for the latter's sites. The telco, which had been looking to sell a stake in the sites to free up cash for investment, will remain responsible for developing its mobile network, with TowerCo in charge of site designs and build-outs.

Ontario Teachers invests in digital infrastructure businesses globally, including in New Zealand.