Cordiant gets the greenlight for Emitel acquisition
Cordiant Digital Infrastructure has received the final required regulatory approval from the Polish Ministry of the Interior for the acquisition of Emitel.
To be purchased from funds managed by Astatine Investment Partners, Emitel is the second large, diversified digital infrastructure platform acquired by Cordiant Digital Infrastructure and the Company's largest investment since launch.
"The completion of the acquisition of Emitel will be a further strategic milestone for the Company. It is a significant acquisition of a profitable and diversified platform in a market where data consumption growth is among the most robust in Europe," said Shonaid Jemmett-Page, chairman of Cordiant Digital Infrastructure Limited.
" Cordiant Digital Infrastructure has constructed a high-quality portfolio, with predictable revenues and cash-flows supported by long tenure contracts and a blue-chip client base. This aligns with the Company's Buy, Build & Grow strategy and offers the potential to generate additional value and further attractive returns to shareholders."
The Company is acquiring Emitel for an equity consideration of PLN 1.92 billion ($409 million) before transaction costs and expenses.
For FY21, Emitel delivered revenues of PLN 486 million and EBITDA of PLN 319 million. As of 31 December 2021, Emitel had outstanding debt of PLN 1462 million, and PLN 131 million in cash on hand.
"Emitel is a strong addition to the Company's portfolio. It is a dynamic and well-managed company with an attractive future growth trajectory," added Steven Marshall, Chairman of Digital Infrastructure at Cordiant Capital.
"It also brings an effective ESG programme aligned with Cordiant Digital Infrastructure's goals in this area, including the use of green energy. The Emitel multi-asset infrastructure platform brings contracts with inflation linkage, strong margins and cash generation characteristics."
Emitel has shown consistent year-over-year growth with a stable business model and high revenue and cash flow visibility. Emitel's broadcast revenue contracts have a weighted average duration of 8 years, while its mobile contracts average 13 years for anchor tenants. It has long been committed to ESG principles and buys 100% of its power from renewable sources, routinely purchasing 50-60% of its annual electricity requirement 1-2 years in advance via Power Purchase Agreements.
Once the Emitel transaction is complete, the dividend target for the year to March 2023 would be increased from 3.0p to 4.0p per ordinary share. In addition, Cordiant Digital Infrastructure will have secured the potential for full usen of its Eurobond facility of €200 million announced in June 2022, €80 million of which was conditional on the closing of the acquisition.
"Emitel is an important component in our strategy for portfolio construction at Cordiant Digital Infrastructure. As was the case with CRA, it is a proven, profitable and diversified platform of digital infrastructure assets able to augment the portfolio's strong cash flow profile," said Benn Mikula, CEO and managing partner at Cordiant Capital.
"This will provide a firm foundation for CORD's dividend and enable further growth capital expenditure that should enhance shareholder returns. We look forward to building CORD in North America and Europe."
The acquisition is expected to complete by mid-November 2022.