PE investors exit Indonesia telecom towers business
The Carlyle Group has exited what was its debut investment in Indonesia – after a nine-year holding period – with the sale of telecom towers operator Solusi Tunas Pratama (STP).
Profesional Telekomunikasi Indonesia (Protelindo), a larger industry peer, agreed to acquire a 90% stake in the business for an undisclosed sum, according to a filing. STP's stock closed at IDR8,400 on September 6, the day the deal was announced, giving the company a market capitalization of IDR9.6 trillion ($673 million). The most recent closing price was IDR12,075.
Carlyle bought a 25% stake in STP in 2012 for a reported $100 million. As of December 2020, it held a 25.5% interest, worth IDR2.4 trillion based on the September 6 price. Southeast Asia-focused private equity firm Southern Capital Group is also an investor in the company, via a stake in the founding family's holding vehicle, which owns 43.2%.
Founded in 2006, STP is an owner-operator of 6,422 telecom towers as well as a network of 38 indoor distributed antenna systems (DAS) – found in shopping malls and office buildings – and 3,000 kilometers of fiber optic cable. It leases out tower and DAS space to local mobile operators, with an average contractual term of 10 years. There were 12,145 tenancies as of December 2020.
The company's coverage spans all 34 Indonesian provinces, but 87% of its tower sites are located in Java and Sumatra, the islands with the highest population density.
Revenue came to IDR1.92 trillion in 2020, up from IDR1.77 trillion a year earlier. Over the same period, EBITDA rose from IDR1.47 trillion to IDR1.6 trillion, while net profit increased from IDR228.4 billion to IDR708.8 billion.
Protelindo generated IDR7.44 trillion in revenue last year from 39,127 tenancies across 21,381 tower sites. This is not the first time the company has facilitated a private equity exit. In 2018, it acquired Komet Infra Nusantara (KIN) for IDR1.4 trillion, taking out Providence Equity Partners, which had provided debt financing to support the establishment of KIN in 2014.
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