Spark New Zealand Limited (ASX:SPK) Announces Sale of Connexa Stake
Transaction Overview
Spark New Zealand Limited (ASX:SPK) has sold its remaining ~17% stake in mobile towers business Connexa to global investment group CDPQ for $314 million. This transaction aligns with previous New Zealand mobile tower EBITDAI multiples, and Spark expects to realise a gain of approximately $70 million in reported EBITDAI upon completion.
Ownership Structure Post-Transaction
As agreed, Connexa’s majority owner, Ontario Teachers’ Pension Plan, will transfer 33% of its shareholding to CDPQ. Following the transaction’s conclusion, both Ontario Teachers’ and CDPQ will hold a 50% co-controlling interest in Connexa. The sale is contingent upon Overseas Investment Office approval and other necessary foreign regulatory filings, with completion projected in the third quarter of FY25. At that time, Spark’s two appointed directors will step down from Connexa’s board.
Future Engagement with Connexa
Despite divesting its stake, Spark will continue as a primary customer of Connexa. Spark will retain control over its mobile network’s development and capacity investments, while Connexa will manage the design and deployment of these projects.
Executive Comments
CEO Jolie Hodson stated, “This sale reflects our commitment to divesting non-core assets to further strengthen our balance sheet. The agreement with CDPQ underscores the high quality of Connexa and ensures it remains well-positioned to serve its customers, including Spark.”
Connexa CEO Rob Berrill added, “We appreciate the support provided by Spark and Ontario Teachers’ in establishing Connexa as New Zealand’s leading mobile tower infrastructure company. We look forward to continuing our partnership as we enhance connectivity for all Aotearoa.”
Motley Fool contributor Abbie Stokes has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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