TAWAL pays €1.2 billion to break into European tower space

United Group has brokered a €1.2 billion deal to sell a portfolio of telecoms towers across Eastern Europe to Saudi Arabia’s TAWAL.

The deal, presuming the parties gain all the necessary approvals, will mark TAWAL’s first foray into Europe. And the company, an infrastructure specialist carved out of Saudi Arabian incumbent STC just over four years ago, might be looking for other European opportunities.

“This partnership with United Group marks our first investment in the European market,” said Mohammed Alhakbani, CEO of TAWAL.

“Our agreement with United Group represents an exciting new chapter for TAWAL and the wider STC Group,” added STC chief executive Olayan Alwetaid. “The agreement is a significant milestone in our ambitious growth strategy and the expansion of our international footprint.”

While there’s nothing explicit in the executives’ comments to suggest the company is about to throw billions more euros at European expansion, it’s not unreasonable to assume that a new chapter requires additional pages and that its ambitions could take it further into the continent.

TAWAL is picking up 4,800 towers from United Group for its €1.2 billion – in cash – across Bulgaria, Croatia, and Slovenia, three of the markets in which it offers mobile services as well as its core TV business. The transaction represents an EBITDAaL multiple of 20.1x, based on 2022 financials, which is a bit lower than some of the towers deals we have seen in Western Europe of late – Deutsche Telekom’s GD Towers sale last summer came in at 27x, for example – but is still not a figure to be sneezed at.

Further, it frees up cash that United Group can spend on, in its own words, “future growth.” And that means more money for the various United Group operating companies and their own network rollouts, but could also mean M&A.

“We are delighted to have successfully crystalised the value of our tower assets in a deal that enables us to delever and navigate global macro-economic pressures,” said Viktoriya Boklag, CEO of United Group. “This will support continued investment in our portfolio companies to ensure they remain competitive in their respective markets.”

And as United Group chairman Nikos Stathopoulos put it, the deal “allows United Group to focus on continued investment in its telecom and media services and infrastructure.” Stathopoulos is also European chairman of BC Partners, the international investment firm that is the majority owner of United Group.

The telco itself points out that it has spent the last three years making acquisitions in Europe, including in Bulgaria and Croatia, and in Greece, where it bought mobile operator Wind Hellas, and as a result operates mobile, fixed Internet, pay TV and media services across seven markets in Southern and Eastern Europe.

“The company will build on its track record of successful M&A and its growing reputation for providing high quality telecoms and media services and look for further opportunities to expand within the EU,” United Group said.

Watch this space on that one.

The towers deal is subject to the usual closing conditions, but the parties expect it to be all tied up during the second half of this year.

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