Morgan Stanley to buy Portugal fibre stake at 20x

13 December 2019 - 12:00 am UTC

Morgan Stanley Infrastructure Partners has agreed to buy a minority stake in Altice’s Portuguese fibre optic network in a deal valuing the broadband company at EUR 4.63bn.

The deal is Morgan Stanley’s infrastructure arm’s second investment in Altice’s Portuguese telecoms assets, following its acquisition last year of a stake in the Netherlands-listed company’s tower portfolio in the country.

Altice said on Friday (13 December) that Morgan Stanley will pay EUR 2.315bn for a 49.99% stake in its Altice Portugal FTTH subsidiary, Portugal’s largest wholesale broadband operator. It will pay EUR 1.565bn in 2020 and make two further EUR 375m payments in December 2021 and December 2026.

The price values the broadband network, which reaches four million premises in Portugal, at a multiple of almost 20 times its EUR 237m forecast 2019 EBITDA.

Morgan Stanley beat competition from a Cellnex-led consortium in the final phase of the bidding process. 

Two sources close to the deal said Morgan Stanley will finance the acquisition with a holdco debt package underwritten by Goldman Sachs.

One of the sources added the joint venture plans to raise opco-level debt after closing to finance the expansion of the network.

A spokesperson for Altice said the company aims to install an additional 1.4 million fibre-to-the-home (FTTH) connections, representing a 35% increase compared to the current network, without specifying a timeframe.

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