Connexa and Ontario Teachers’ announce agreement to acquire 2degrees’ tower assets

Connexa and Ontario Teachers’ Pension Plan (“Ontario Teachers’”) today announced they have reached an agreement with 2degrees Mobile (“2degrees”), an entity owned by managed funds of Macquarie Asset Management and Aware Super, to acquire 2degrees’ passive mobile telecommunications tower assets for $1,076m. Connexa was formed following the sale of a 70% stake in Spark New Zealand’s (“Spark”) passive mobile tower infrastructure assets to Ontario Teachers’ in July 2022, with the transaction closing in October 2022.

2degrees currently owns and operates approximately 1,124 mobile towers located across Aotearoa New Zealand. Under the terms of the deal, 2degrees has entered into a 20 year-agreement with Connexa (plus rights of renewal) to secure access to existing and new towers, with an additional tower build and co-location commitment of 450 sites over the next 10 years.

Connexa CEO Rob Berrill said:

“Connexa is Aotearoa’s first independent mobile towers business with a focus on investing in our country’s digital infrastructure to enable a more connected future. We currently operate over 1,200 mobile sites and have been commissioned by Spark to deliver New Zealand’s largest forward-committed new site build programme of over 670 sites over the next 10 years.

With the addition of 2degrees’ mobile towers and the committed build to suit programme, we will be able to achieve greater operational efficiencies through increased infrastructure sharing, which means fewer unnecessary mobile tower builds in local communities and faster deployment of towers to improve network coverage and capacity across Aotearoa.

Our model is to focus on serving our customers through a long-term approach to asset management, and increasing asset utilisation and performance, and we’re excited to bring that same approach to 2degrees’ mobile towers.”

Ontario Teachers’ will contribute all the additional equity capital required to the acquisition. Following completion of the acquisition, Ontario Teachers’ shareholding will increase to approximately 83% and Spark’s shareholding will reduce to approximately 17%.

Bruce Crane, Senior Managing Director and Head of Asia Pacific Infrastructure & Natural Resources at Ontario Teachers’ said:

“This acquisition of high-quality digital infrastructure assets increases Connexa’s scale and capabilities, creating Aotearoa’s leading digital infrastructure platform. As a responsible and long-term investor in the region, we are committed to supporting Connexa as it significantly expands its mobile tower network in the years to come to meet the country’s growing mobile and data demand needs. We are also very pleased to have the opportunity to grow the strong relationship we have established with Spark and welcome 2degrees as a long-term partner for Connexa. “We are excited to further grow our infrastructure portfolio in Asia-Pacific and specifically New Zealand which remains a key market for Ontario Teachers’ across multiple asset classes.”

In addition to Ontario Teachers’ acquisition of Spark’s tower assets, it has previously invested in Asia Pacific Healthcare Group, New Zealand’s leading pathology business, Lumino the Dentists (through Abano Healthcare), the country’s leader in dental care, and OTPPNZ, which operates 35,000 hectares of timberland in the Central North Island region. Completion of the acquisition is subject to customary approvals from the Overseas Investment Office (OIO) and Commerce Commission and is anticipated to occur in mid-2023.