PE investors set for part-exits as ATC buys 51% of India's Viom

ATC said in a filing that it would pay INR76 billion ($1.17 billion) in cash for Viom, which was formed through a merger between Quippo and Tata Teleservices' telecom tower division in 2009. As part of the agreement, the US-listed company may acquire or be required to acquire the outstanding 49% in Viom.

Macquarie SBI and IDFC Private Equity Fund III will retain certain interests in the company, as will Tata Teleservices and SREI Infrastructure Finance. SREI is a listed entity controlled by the Kanoria Foundation; Kanoria Group is the current managing shareholder of Viom. SREI and other Kanoria block shareholders will sell their entire stake to ATC for $452 million, according to a separate filing.

Viom currently owns and operates approximately 42,200 wireless communication towers and 200 indoor distributed antenna systems across Asia. ATC's existing India portfolio of approximately 14,000 towers will be merged with that of Viom.

IDFC first invested in the equipment rental business of Quippo in 2007 and supported the mergers that resulted in Viom. AVCJ Research's records show that in 2009, IDFC and Oman Investment Fund - both of which are described as existing investors - agreed to invest approximately $187 million in the company, with SREI also participating. Macquarie SBI committed $312 million for an 11% stake in 2010.

For the three months ended June 2015, Viom's annualized rental and management revenue reached approximately INR50 billion, while annualized EBITDA came to 18.54 billion. It also had INR58 billion in rupee-denominated debt outstanding. For the 12 months ended June 2015, EBITDA was INR18.27 billion.

"Through our joint ownership with the Tata Group of over 56,000 towers, American Tower will be strategically positioned to benefit from the leasing revenue growth opportunities that will come from the accelerating deployment of 3G and 4G technologies by all of the wireless carriers in the market," Amit Sharma, ATC's executive vice president and Asia president, said in a statement.

ATC is a global real estate investment trust (REIT) and a leading independent owner, operator and developer of multi-tenant communications real estate with a portfolio of approximately 97,000 communications sites. The company generated $4.1 billion in revenue for the 2014 financial year, up 22% year-on-year. EBITDA also rose 22% to $2.65 billion.

The Viom sale is expected to close by mid-2016, pending regulatory approval. Evercore and Kotak Investment Banking advised ATC on the deal, with Clifford Chance, AZB & Partners and Luthra & Luthra serving as legal counsel. Credit Suisse and Cyril Amarchand Mangaldas advised Viom.

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• Topics
• Exits
• Infrastructure
• South Asia
• Exit
• Infrastructure
• India
• Macquarie Group
• IDFC Private Equity
• Trade sale