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