Bankinter | Cellnex has sold 1.100 telecommunication towers in the UK to Wireless Infrastructure Group (WIG) for 170 million euros. The EBITDA generated by the afore-mentioned towers would be around 8 million euros. So the sale price represents 21x EBITDA.
Bankinter’s analyst team view:
Good news for Cellnex. This sale is not for strategic or economic reasons. It was the commitment agreed with the UK regulator in order to approve the purchase of 6.000 sites from Hutchison in Great Britain. The sale price implies an EV/EBITDA of 21x, clearly above the 15x at which Cellnex is currently trading.
We maintain our Buy stance. Although the share price will still lag for some time because of the uptick in bond yields, it offers a good buy opportunity in the medium and long term. The fundamentals are solid: i) European leader in telecommunications towers; ii) High visibility in cash flows, with growth close to 20% 2021-2025e and an attractive future return (annual>6%); iii) strong investment capacity (c. 10 billion euros); and solid financial position, with average maturity of more than 6 years and for the most part at fixed cost. Whatsmore, it offers protection against inflation, with most of its contracts linked to CPI.
CELLNEX (Buy; Target Price 52,9 euros/share)