Cellnex chief resigns as tower deals bonanza draws to a close

The founder and chief executive of the largest mobile tower company in Europe resigned on Wednesday after the three-year dealmaking spree that transformed it into one of the biggest players in the sector came to an end.

Tobias Martínez, 64, who has been at the helm of Cellnex for eight years in which time it also became Spain’s largest telecoms group, will step down on June 1, the company said.

“It is a very thoughtful decision, in which various factors — professional and personal — come together,” Martínez told the Financial Times.

Martínez’s departure comes at a time of retrenchment for tower groups around the world. When debt was cheap, masts — the metal structures on which radio antennas sit — were some of the most valuable assets in telecoms, trading at high multiples and offering private investors attractive returns.

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But for several months rapidly rising interest rates have driven up the cost of capital for these heavily indebted businesses, causing their share prices to tumble. Cellnex’s share price has fallen about a quarter over the past year.

Cellnex announced in November its ambition to gain an investment grade rating, which would mean reducing its leverage from eight times earnings before interest, tax, depreciation and amortisation to below seven times. The company has net debt of €17.1bn.

At the time, Martínez told the FT that mergers and acquisitions in the European market — that allowed Cellnex to amass 130,000 towers across a dozen European countries and grow its market capitalisation to €23bn — was “over”.

Cellnex will focus its attention on reducing debt and limiting capital expenditure over the next two years, he said.

Cellnex was not involved in either of the two largest transactions in European towers, when two of the biggest operators — Deutsche Telekom and Vodafone — sold stakes in their masts businesses to private equity groups that were able to offer attractive valuations.

Deutsche Telekom agreed in July to sell a majority stake in its towers business to Brookfield Asset Management and private equity group DigitalBridge, valuing the business at €17.5bn, or 27 times ebitda.

And in November, Vodafone agreed to sell up to 50 per cent of its masts business to KKR and Global Infrastructure Partners, bankrolled by Saudi Arabia’s Public Investment Fund, which valued the company at €16.2bn, or 26 times ebitda.

Even if credit became cheaper again, there are few attractive assets left to acquire.

Martínez, whose current contract would have ended in December 2024, said on Wednesday: “The current economic and financial context demands that we open a new chapter in Cellnex’s story . . . based on maximising organic growth, consolidating the industrial project in the countries where we operate today and focusing on balance sheet management.”

Chair Bertrand Kan said: “During his time at the helm of Cellnex, Tobias has shown vision, energy and expertise in leading Cellnex’s transition from a national operator, focused on the Spanish market, to a European company with a presence in 12 countries.”

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