Cordiant Digital Infrastructure, a newly-launched investment trust, has picked up its first two investments, a mobile towers business in the Czech Republic and a fibre network in Norway.
The company this week announced that it has acquired telecoms and TV towers firm České Radiokomunikace and an unnamed Norwegian fibre network plus land for a combined total of £451 million, comprising £318 million in equity and the assumption of £133 million in debt. Macquarie Asset Management, which had owned České Radiokomunikace for around a decade, confirmed the sale of the asset, but the parties did not split out the value of that portion of the deal.
České Radiokomunikace clearly accounts for the bulk of the assets picked up by Cordiant though. On completion of both deals it will hold 660 TV, radio and telecoms towers, around 300 microwave connections, a network of 4,850 kilometres of fibre and six edge data centres.
The two deals account for the bulk of the net proceeds of the February IPO that created Cordiant Digital Infrastructure.
Cordiant Capital raised £370 million – ahead of its initial target – by selling off new shares in a digital infrastructure fund in mid-February. Cordiant Digital Infrastructure, as the fund is known, then listed on the London Stock Exchange. Cordiant Capital already has a strong presence in the telecoms space, but the new fund was set up specifically to invest in the infrastructure side of the industry, with a focus on telecoms towers, data centres and fibre networks. The fund itself said it was looking to tap into the long-term returns those types of assets afford.
“This is an exciting time to be investing in digital infrastructure and we look forward to updating you on the first investments in the coming months,” said Benn Mikula, Managing Partner and co-CEO of Cordiant Capital, at the time.
Less than three months on and he has done exactly that.
Cordiant Digital Infrastructure said that on completion of the two deals – it has closed the České Radiokomunikace buy and has submitted a binding letter of intent for the Norwegian assets – it will be left with £43.4 million in proceeds from the IPO.
The fund talked up the assets it has acquired in the Czech Republic, describing České Radiokomunikace as “a highly successful digital infrastructure platform with contracted, long term, growing revenues in a strong and dynamic Central European country demonstrating rapid convergence with the economies of the European Union’s historic core.” Amongst other things, the firm’s digital broadcast towers would be challenging to replace or replicate, it noted, highlighting historically robust demand for broadcast entertainment in the country.
“Growth opportunities for CRA [České Radiokomunikace] exist in supporting the mobile operators with infrastructure as well as in expanding the size and reach of the data centre platforms,” it added. There is significant potential to expand CRA’s early, successful, network offerings in the Internet of Things. The network already offers smart metering for water, electricity and gas for companies including E.ON and RWE.”
The fund was a bit less forthcoming about its soon-to-be new asset in Norway though.
The fibre network in question links regions of Norway to Scandinavia and Europe beyond, it said, with customers including telcos, industrial concerns and utilities locked into long-term contracts. “Approximately half of the network’s fibres have currently been leased, offering significant potential to increase revenues with existing and new customers (such as data centre operators),” it said, explaining that the region offers low-cost, environmentally-friendly and abundant electrical power and is therefore expected to prove attractive to data centre operators looking for low operating costs.
Perhaps Cordiant will give us a name when the deal closes.