A significant move was recently made in the telecommunications sector, as Phoenix Tower International secured a deal to acquire NOVEC’s German unit. This acquisition enables Phoenix Tower access to a high-potential European market. As an active player in passive infrastructure, Phoenix Tower’s recent expansion strategy continues with full force. Although the details of the deal remain undisclosed, the figures are said to be substantial. NOVEC’s current presence in Germany includes 220 sites, with a large number of new sites in development.
What makes this deal stand out is not its size, but the crucial entrance of Phoenix Tower into a fresh market. This move comes amid a period of relative decline in M&A activity within the tower sector. Indeed, Germany is notable for being a wireless build-out hub. Dagan Kasavana, CEO of Phoenix Tower International, stressed the importance of Germany as a vital global market, especially across rural areas needing enhanced coverage, which is where the NOVEC team excels with their solutions.
Another point in Germany’s favor is its position as Europe’s largest economy, with major competitors deploying 5G, plus the presence of a new mobile network operator, 1&1. Despite its network rollout being marred by issues and delays, mainly due to the infrastructural conflicts with Vantage Towers, 1&1 is definite proof of Germany’s potential for growth within this sector.
Driven by the goal to establish their brand more prominently across Europe, Phoenix Tower recently expanded its French footprint by closing two deals with Cellnex and Bouygues Telecom, adding almost 2,000 sites to its portfolio. Furthermore, Phoenix Tower recently arranged a new €1.2 billion senior credit facility in Europe to streamline existing loans and stimulate additional growth.
Kasavana expressed that this “multi-jurisdiction loan” provides Phoenix Tower the needed flexibility to enhance their business growth within Europe. The financing will facilitate further investment in establishing digital infrastructure in markets where demand for connectivity and technical advancements is surging.
While rivals like Cellnex have announced that they would hold back on spending due to the financial situation, Phoenix Tower is actively on the lookout for potentially lucrative deals. Additionally, recent reports suggest that investors are maintaining interest in the company, with a consortium of BlackRock and Grain Management reportedly in talks to acquire about 20% of Phoenix Tower from existing backer Blackstone.
Although the telecommunications infrastructure market has experienced fluctuations in the past year, this series of moves makes it clear that there’s still significant capital moving in this sector. The advancements by Phoenix Tower herald an intriguing chapter in the sector’s evolution.
