WindTre closes OpNet purchase

While one of the big attractions of the deal for WindTre was the acquisition of network infrastructure and spectrum licences, it has made it clear that this deal is not just about buying assets. It will continue to run its new subsidiary as a wholesaler and provider of services to businesses and public bodies, and has every intention of retaining the OpNet brand to do so.

OpNet, formerly known as Linkem, runs a 5G-based fixed wireless access network using 3.5 GHz spectrum, including 3,000-plus base stations and covering around 75% of the Italian population. And, specifically on the wholesale side, it can also offer solutions and services based on 5G SA.

CK Hutchison-backed WindTre was an obvious buyer for such an asset, once it went on the block.

Now former owner Jefferies Financial Group was keen to offload OpNet because it has reshaped its business to focus on operating as what it describes as a pure play global investment banking and capital markets firm.

"We are pleased to complete the sale of OpNet's operation to Wind Tre, the last in a series of transactions that monetized a substantial portion of our legacy merchant-banking assets," a canned comment ascribed to Rich Handler and Brian Friedman, CEO and President of Jefferies respectively, reads.

From a telecoms perspective, the point is that WindTre has not just paid hundreds of millions of euros for a struggling asset, but rather one that no longer fit with its previous owner's strategy.

On the subject of price, Jefferies said it receive net cash proceeds of approximately $317 million between the Tuesday’s closing date and the first half of next year.

At first glance, that seems significantly less than the €485 million price tag WindTre and Jefferies attached to OpNet when they inked their deal back in February. But a closer look at the terms and conditions they shared shows that the headline figure consisted of cash sufficient to satisfy all of OpNet's financial debt, transaction costs and other cash obligations and approximately €225 million to be paid in cash or bonds. Essentially, it wasn't purely a wedge of cash for Jefferies.

WindTre made no comment on the price though, concentrating instead on the benefits its new acquisition will bring from an operational perspective.

"The acquisition of OpNet will enable Wind Tre to offer even more reliable 5G and FWA (Fixed Wireless Access) services and to develop the most innovative technological solutions for the digitalization of companies and public administrations," the telco said, in an Italian language statement.

It will be interesting to see whether WindTre leans on this acquisition to further push its retail FWA business.

Italy has a relatively well developed FWA market, the technology accounting for more than 10% of fixed accesses as of the end of March, according to figures from regulator Agcom. WindTre ranks fifth in the sector (see chart below), with a share of less than 5%, so arguably has plenty of scope for expansion.