Red Eléctrica has agreed to sell 49% of Reintel to the KKR fund for 971 million euros. The operation, which is carried out through the subsidiary Rudolph Bidco, involves acquiring a minority stake in a company with an EBITDA of 104 million, which represents a valuation multiple of 22.1 times the EBITDA.
The acquisition fits with the provisions of the Red Eléctrica Group’s Strategic Plan 2021-2025, which contemplates the enhancement of strategic assets, through the potential sale of minority stakes, which will allow promoting the development of said assets by developing alliances and giving visibility to their value generation potential.
The Red Eléctrica Group faces the challenge of making a strong investment in the 2021 period ?? 2030 to contribute to the energy transition and the development of their businesses while maintaining a solid financial position and in a context in which their regulated remuneration is expected to suffer a significant reduction.
The activity of the subsidiary REINTEL is focused on the maintenance of the fiber optic cables and telecommunications equipment of Red Eléctrica and on the leasing of unused fiber optics for electrical or rail and site use to telecommunications companies. REINTEL has a fiber optic network of more than 50,000 km of cables, deployed on the transport network of the electrical system and the rail network, and guarantees transparent and neutral access to all agents in the sector.
Roberto García Merino, CEO of Red Eléctrica, highlighted “the Group’s satisfaction with the agreement reached with KKR after a meticulous analysis process that ensures that from now on we have a highly prestigious strategic partner with a vocation of permanence. The agreement puts in value, even more if possible, the Group’s telecommunications activity and will help us to promote its development, reinforcing the essential services that we provide to society “.
For his part, Oleg Shamovsky, managing director and head of Core Infrastructure at KKR for Europe, underlined that “this is an important strategic alliance for KKR with a large capitalization and highly respected Spanish company. For many years we have closely followed Reintel’s evolution and we are delighted to have the opportunity to invest in this strategic telecommunications infrastructure company, as well as to contribute KKR’s know-how and industry experience in this strategic collaboration with the Red Eléctrica Group. “
The operation is subject to customary conditions, such as obtaining the required regulatory approvals, and its closure is scheduled for the second quarter of 2022.
UBS and Barclays acted as financial advisers to Grupo Red Eléctrica, and Garrigues provided legal advice.