PE firms eye controlling stake in Tower Vision

Private equity firms are in the race to acquire a controlling stake in Gurgaon-based tower firm Tower Vision, two persons close to the development told VCCircle.

The owners of Tower Vision have hired Kotak Mahindra Capital and Axis Capital Partners to find buyers, as it aims to take advantage of the on-going consolidation in the tower sector, the persons cited earlier said.

The Economic Times reported earlier on Monday that four PE firms—Apax Partners, Blackstone, Carlyle and Brookfield Asset Management—were conducting due diligence to place a bid for a controlling stake later in January. Tower Vision is being valued at $250 million to $300 million, the report said, citing four persons close to the development.

While Carlyle and Brookfield declined to comment; Apax Partners, Blackstone and Tower Vision did not respond to requests for comments by VCCircle.

Tower Vision is the latest telecom tower infrastructure asset eyed by investors.  

Buyers are currently spoilt for choice as numerous tower companies are available for sale, competing for attention from nearly the same set of investors.

In October 2016, Bharti Airtel said it will look to sell a stake in its tower arm Bharti Infratel. While The Economic Times reported that the firm had begun negotiations with CPPIB and KKR, Mint reported in December 2016 that Brookfield Asset Management was also in the fray.

Idea Cellular has also hired Bank of America Merrill Lynch (BAML) to sell a majority stake in its tower company Idea Cellular Infrastructure Services Ltd, having reached out to buyers including American Tower Corporation, Brookfield Asset Management and Bharti Infratel.  

The ongoing tower deals will likely benchmark their valuation expectations on two signed deals in this space.

In December 2016, Brookfield Asset Management agreed to acquire a majority stake in the tower business of Reliance Communications for Rs 11,000 crore ($1.6 billion) in cash. This transaction emerged as the largest private equity deal by value in 2016, although the transaction is in the process of being closed.

In terms of deal value, this deal exceeds the acquisition of Viom Towers Ltd by NYSE-listed American Tower Corporation (ATC). ATC acquired a 51% stake in telecom tower firm Viom Networks Ltd for Rs 7,635 crore ($1.2 billion) in cash in April 2015.

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