TDF

Arcus first identified and evaluated this opportunity in H1 2013. Arcus led the formation of a consortium which was ultimately granted exclusivity in a bilateral deal in August 2014. As part of the transaction, TDF’s non-French operations (mostly Germany) were carved out prior to closing in order to create a pure-play, French broadcasting and towers company. The transaction was further complicated by the significant amount of debt supporting the broader TDF group. Arcus led the arrangement of a very attractive bank financing package, which the consortium intends to refinance in the international bond markets.

Leveraging its long-standing deep sector knowledge in the telecom infrastructure space, Arcus will be managing its own investment as well as APG’s and PSP Investments’ in TDF, which in aggregate represents a 50% shareholding in TDF. The remaining 50% is owned by Brookfield.

The acquisition is in line with Brookfield’s strategy to expand its footprints in the European communication infrastructure industry.

The consortium is considering selling down a minority stake of up to 10% to a French reference investor.

Rationale

• Benefit from Brookfield’s experience in the infrastructure sector to capture follow on growth opportunities, both organically and through acquisitions
• Strengthen and expand TDF’s market position through the increasing tower deployment by mobile network operators as a result of rising mobile data consumption needs

TDF at a glance

Founded in 1975 and headquartered in Montrouge (France), TDF provides services and infrastructure to the media, broadcasting and telecommunications sectors in France. The company owns and operates a high quality, national network of infrastructure with more than 6,690 multi-purpose towers and active rooftop sites, as well as 5,000 km of fibre backbone. These essential services drive almost 90% of the current revenues of the business and are supported by long-term contracts and inflation-linked cash flows. The portfolio’s growth will be driven by increasing tower deployment by mobile network operators as a result of rising mobile data consumption needs. During its fiscal year ending on 31 March 2014, the Company generated c.€740m of revenues and c.€370m of EBITDA.