TowerXchange Exclusive Coverage
Despite press reports that KKR was the last bidder in the running, DigitalBridge Group, Inc. (NYSE: DBRG) seemingly came out of nowhere yesterday to join with Brookfield Infrastructure Partners (NYSE: BIP) to acquire a 51 percent ownership stake in Deutsche Telekom’s GD Towers. The transaction, valued at $17.5 billion, included 40,000+ sites in Germany and Austria.
Cellnex Telecom, which was aligned with Brookfield, withdrew its offer to acquire a stake in Deutsche Telekom’s tower portfolio, which reportedly left a consortium led by KKR as the sole bidder for the assets, as previously reported by Inside Towers. But when Cellnex bowed out, DigitalBridge stepped in and teamed up with Brookfield and won the bid.
“Brookfield is an incredibly strong financial investor, having invested in tower assets in the past, while we are an operator investor. They’re a great partner. It’s a great combination that brings a lot to the table,” said Steven Sonnenstein, Senior Managing Director, DigitalBridge, who spoke at the TowerXchange Meetup Americas 2022 in West Palm Beach, FL.
In short, DigitalBridge/Brookfield’s offer of cash tipped the scale in their direction, while Cellnex had offered stock, according to Sonnenstein. But it wasn’t just the cash that helped close the deal. DigitalBridge’s qualifications as a global investor/operator also played a role in the transaction, according to Sonnenstein.
Deutsche Telekom wanted to remain involved in the tower assets, Sonnenstein said, which is represented by the structure of the deal. “Ultimately, I think what was important for Deutsche Telekom was to partner with a company that will offer more than just capital to the transaction. They wanted a company that can help them operate this business and grow it,” Sonnenstein said.
Sonnenstein stressed that the deal didn’t happen overnight. “It’s a transaction that is built off of relationships that have been around for over a decade or so. Our CEO [Marc Ganzi] has a long established relationship with Deutsche Telekom,” he said.
Back in May, Mobile World Live reported that Brookfield was considering a joint bid for Deutsche Telekom’s towers unit with Cellnex, which jointly owns towers with Deutsche Telekom in Switzerland and the Netherlands. There were also reports that Brookfield might go it alone. At that time, DigitalBridge Group was listed as an interested party along with Stonepeak Infrastructure Partners, KKR and Vodafone Group’s Vantage Towers.
By J. Sharpe Smith, Inside Towers Technology Editor