In a $2.5 billion all-cash agreement, Canada’s Brookfield has defeated Miami-based infrastructure investment group I Squared Capital to purchase the entirety of the India division of Boston-based American Tower Corp (ATC). Friday is the day that the two parties will sign.
“In an official statement released on Friday, ATC stated that it has reached a definitive agreement with Data Infrastructure Trust (“DIT”), an Infrastructure Investment Trust supported by an affiliate of Brookfield Asset Management, under which DIT will purchase all of the equity interests in American Tower’s operations in India (ATC India).”
Brookfield’s telecom tower operations in India are currently housed under DIT under the names Summit Digitel and Crest Digitel. This will be the third acquisition made by Brookfield in the Indian telecom market.
The telecom tower operator based in Boston stated that, subject to certain pre-closing arrangements, the total cash proceeds to ATC at closure could potentially amount to up to $2.5 billion at current exchange rates. The transaction is anticipated to occur in the second half of 2024 and represents the conclusion of the previously disclosed strategic evaluation of ATC’s activities in India. Customary closing conditions, such as governmental and regulatory approvals, apply.
The enterprise value of the ATC India operations is estimated to be $2 billion (about Rs 16,500 crore), and the total cash proceeds also include a ticking charge that will be paid from October 1, 2023, to the closure date. The enterprise value proceeds are linked to the assumption of the current India term loan by DIT and the redemption of existing intercompany debt, according to ATC.
Additionally, and taken into account within the aforesaid total possible cash flows, ATC will be entitled to future payments linked to existing ATC India receivables as well as the full economic advantage associated with the optionally converted debentures (OCDs) issued by Vodafone Idea.
The transaction’s proceeds are anticipated to be utilised to pay off ATC’s current debt.
ATC has received financial advice from CDX Advisors and Citi, respectively, in the role of lead financial advisor. American Tower has appointed Talwar Thakore & Associates (TT&A) as its primary legal advisor.
ATC notified the US Securities and Exchange Commission (SEC) in a recent filing dated October 26 that, as a result of ongoing business difficulties in the nation and its intention to sell equity interests in ATC-TIPL, it incurred a goodwill impairment charge for its India unit in the quarter that ended in September 2023 of $322 million (roughly Rs 2,677 crore).
