Brookfield, PSP, Arcus and APG acquire French telecom business

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Brookfield, PSP, Arcus and APG acquire French telecom business

A Brookfield-led consortium have committed to acquire, in accordance with French practice, TDF, the largest independent communication tower infrastructure business in France.

The consortium is formed by Canadian asset manager Brookfield, Canadian pension fund PSP Investments, London-based Arcus Infrastructure Partners and Dutch pension fund APG.

TDF provides essential services and critical infrastructure to the media broadcasting and telecom sectors in France in a manner similar to typical utility infrastructure.

The company owns and operates a high quality, national network of unique infrastructure with more than 6,690 multi-purpose tower and active rooftop sites, as well as 5,000 km of fibre backbone. These essential services drive almost 90% of the current revenues of the business and are supported by long-term contracts and inflation-linked cash flows.

Under this commitment, a Brookfield-consortium would be acquiring 50% of the business for an enterprise value of approximately €1.78 billion (US$ 2.2 billion). The other 50% of the business would be acquired by the other transaction partners. It is expected that Brookfield Infrastructure's equity commitment towards this investment would be approximately US$500 million and would represent approximately a 23% interest in TDF.

BNP Paribas, Credit Agricole, Societe Generale, Lloyds and Royal Bank of Scotland are expected to provide the financing for the transaction.

This transaction is subject to completion of customary labour consultation under French labour law, satisfactory to the seller, and other customary closing conditions including regulatory approvals expected to be completed in the first quarter of 2015.

Sam Pollock, CEO of Brookfield Infrastructure, stated:

"TDF represents an exciting opportunity to invest in one of the leading European communication infrastructure operators. This is a platform with significant scale, comprising a portfolio of high cash flow generating assets with strong growth potential. Given TDF's extensive infrastructure footprint, we believe we are well positioned to capture follow-on opportunities in the sector."

Morgan Stanley has advised PSP Investments on the deal and Rothschild and Goldman Sachs has worked with TDF's owners.

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