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Infratil Limited (ASX:IFT), established in 1994 and based out of Wellington, New Zealand, owns and operates infrastructure and utility businesses and investments in Australia, New Zealand, and the US. The company’s current portfolio is focused on a few key sectors and dominated by energy, data infrastructure and airports.
On 14th May 2019, a consortium comprising Infratil Limited and Brookfield Asset Management Inc. announced that it had executed a conditional agreement to acquire Vodafone New Zealand Limited (Vodafone NZ) from Vodafone Group Plc at an enterprise value of ~ NZD 3.4 billion, to be funded by a NZD 1,029-million equity contribution from Infratil and Brookfield each and partly via Vodafone NZ level debt as well as a Vodafone NZ executive team’s portion of equity.
Particularly, Infratil's equity contribution includes a fully underwritten equity raising of up to NZD 400 million, and a combination of NZD 400-million debt from a committed acquisition debt facility and the use of existing debt facility headroom.
The Acquisition of New Zealand's well-known mobile telecommunications company is defined by a strong investment rationale.
Vodafone NZ would provide Infratil an enhanced exposure to long-term data and connectivity growth and the acquisition also complements that of Canberra Data Centres. Moreover, after the recently implemented divestments, the new decluttered Infratil portfolio also holds substantial positions across data, airports, retirement and aged care, and renewable energy.
For the 12 months to 31st March 2019, Vodafone NZ generated revenue of NZD 2.0 billion and an Underlying EBITDA of NZD 463 million. Thus, the transaction for the conditional acquisition depicts an enterprise value to FY2020F underlying EBITDA multiple of 6.9x – 7.4x. Besides, it is anticipated to generate strong cash flow that would assist in tapping into growth opportunities as they arise.
Infratil’s Chairman, Mark Tume explained that the acquisition is strategically compelling for Infratil and also confirms the company’s consistency in generating proprietary investment opportunities for the shareholders as it revives an independent enterprise that was formerly owned by a multinational.
In addition, Stewart Upson, Managing Partner, Brookfield and CEO Asia Pacific, also added that data is one of the fastest growing commodities in the world and the trend is expected to continue in the foreseeable future. The key drivers of the same include rising penetration of smartphones, increasing video consumption, the introduction of 5G networks, and other related developments.
Recently on 24th April 2019, Infratil announced the appointment of Catherine Savage to its Board of Directors, effective 1st August 2019.
Besides, a presentation for the annual Investor Day was published by the company on 10th April 2019, describing how the business performance and their delivery of strategic objectives is progressing. The full year results for the period ended 31st March 2019 are scheduled to be disclosed on 17th May 2019.
Moreover, the preliminary EBITDAF guidance provided for the 2020 financial year states that the Underlying EBITDAF from continuing operations is projected to lie between $ 510-$ 540 million.
With around 559.28 million outstanding shares, the IFT stock price was trading at AUD 4.210, down 3.218% on Tuesday, 14th May 2019, at AEST 02:52 PM.
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