Cellnex: valuation of TDF around 18x its EV/EBITDA

telecommunications towers sector in Europe

Renta4 | Cellnex (CLNX) has contracted Goldman Sachs for the acquisition of a holding in the French company TDF. The news limits the posible holding to 60%, in a company in which Brookfield, which holds 45%, has announced the sale of its holding.

The remainder of the capital is in the hands of a consortium of funds which controls 45% and Credit Agricole which controls the remaining 10%. The value of 100% of the company is estimated at 5 billion euros, which counts with a porfolio of more than 18,000 installations, of which 40% relate to television and radio and the rest to mobile telephone towers.

In 2018 TDF invoiced 671 billion euros in income and 354 million euros in EBITDA, which means that if the valuation is confirmed it would be paying a multiple EV/EBITDA of around 18X, somewhat above Cellnex´ current stock market price. We will have to await the competitive sale process, knowing that there will be significant competition from investment funds. If it is confirmed it would be very positive for the share price which finds itself trading at demanding levels. We reiterate the recommendation of overweight, objective price 27.1 euros.