Telecom Italia Spin-off (Data Centers) Notes

November 19, 2020 – Update

  • Telecom Italia announced in October that it will spin-off its data center business into a separate company.
  • The plan is to raise capital through an IPO but for Telecom Italia to retain majority control of the company.
  • Telecom Italia will use proceeds from the IPO to pay down debt.
  • Data Center 2020 revenue is estimated at €500m and annual growth is expected to be ~20% going forward.
  • Good Bloomberg article on the proposed transaction:
    • Company will include 23 data centers in Italy.
    • Rumored valuation is 1 billion euros. (doesn’t seem like this will move the needle much in terms of reducing TI’s debt).
    • Many other telco’s have sold or listed their data center businesses.

    • TI expects the data center IPO to be valued at between 12x and 18x EBITDA

    • Gubitosi’s data center plan would replicate what Telecom Italia did with its wireless towers, hiving them off into a new unit called Inwit and listing it on the Milan Stock Exchange in June 2015. Since then, Inwit shares have more than doubled.

  • Elliott Management and Vivendi have a long running fued over the direction of the company. Here is a recent slide deck that Elliott published.