Cellnex continues acquisition spree with NOS Towering deal

Cellnex picked up more assets in Portugal as it continued an acquisition blitz that has seen it spend billions on mobile infrastructure in Europe, in preparation for the potential new business that 5G network coverage and capacity expansion plans will bring.

The latest deal sees the company expand its presence in Portugal through the acquisition of 100% of NOS Towering from mobile operator NOS. Cellnex only recently entered the Portuguese market for the first time, buying Portuguese towers and sites operator Omtel from Altice Europe (25% stake) and Belmont Infra Holdings (a consortium holding a 75% stake).

Cellnex is paying about €375 million ($410 million) for 2,000 sites, and indicated that a further €175 million ($191 million) will be invested in building a further 400 sites over six years. NOS will continue to use the sites under a 15-year deal, extendible by successive additional 15-year periods.

The move to add more assets in Portugal continues an M&A-fueled expansion drive that has seen Cellnex become Europe's hottest mobile infrastructure neutral host, operating a portfolio of about 61,000 sites (including forecast rollouts up to 2027) in Spain, Italy, the Netherlands, France, Switzerland, the UK, Ireland and Portugal. It recently signed an agreement with Bouygues Telecom to form a new joint venture company that will deploy a national fiber optic network with a particular focus on supporting the rollout of 5G in France.

Cellnex said it expects the new assets in Portugal to add an estimated €50 million ($55 million) to EBITDA once they are fully integrated and the new sites have been rolled out. In 2019, its expansion strategy helped boost revenue by 15% to exceed €1 billion ($1.1 billion), with EBITDA rising by 16% to €686 million ($749 million). Cellnex still posted a loss of €9 million ($9.8 million) last year, but for 2020 it is forecasting EBITDA of €1.065 billion ($1.163 billion) to €1.085 billion ($1.185 billion) and recurring free cash flow growth of more than 50%.

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— Anne Morris, Contributing Editor, Light Reading

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