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.