The structures of the Kismet Capital Group of the ex-general director of Megafon Ivan Tavrin acquired the Russian Towers company, one of the largest independent tower operators. The asset will enter the New Towers company, which Tavrin is creating together with Megafon. The company will become the largest owner of the tower infrastructure in Russia.
Kismet Capital Group acquired Russian Towers
Kismet Capital Group (KCG) by a renowned telecommunications and media manager Ivan Tavrin, reported CNews about the acquisition of the independent tower operator Russian Towers. 100% of the company’s shares will be acquired, the amount of the transaction has not been disclosed. Part of the financing for the transaction was provided by Sberbank.
Russian Towers is one of the first independent tower operators in Russia. Until recently, the company was the largest owner of tower infrastructure after cellular operators. Now it owns about 7.2 thousand objects of tower infrastructure. The largest shareholder of the company is the UFG Private Equity fund. Also among the shareholders are EBRD, Sumitomo and Ceecat Capital.
Ivan Tavrin in 2012-2016 was the general director of the mobile operator Megafon. Now, through KCG, he owns the Media-1 media holding and another tower company, Vertical. In addition, KGG has listed three SPAC companies, Kismet Acquisition One, Kismet Acquisiton Two and Kismet Acquisiton Three, on the NASDAQ stock exchange, which do not have assets and are intended to be merged with other structures. The first of these merged with the mobile game developer Nexters.
How the ex-head of Megafon bought the operator’s cell towers
At the end of 2021, KCG and Megafon agreed to merge their tower assets: Vertical and the First Tower Company (PBK) created by Megafon. Control over the merged company should be acquired by KSG, Megafon’s share will be 25%. As part of the deal, PBK was valued at 94.2 billion rubles. Sberbank also provided financing for the transaction.
Ivan Tavrin’s structures acquired Russian Towers, one of the largest independent tower operators in Russia
According to KCG, Russian Towers will be part of the New Towers merged company, which is being created on the basis of Vertikali and PBK. Upon completion of the transaction, 65% of the stake in New Towers will belong to KCG, 25% to Megafon, and 10% to the founders of Vertical. “New Towers” will own 30 thousand tower infrastructure facilities and will become the largest company by this indicator in Russia.
Why “Russian Towers” decided to sell
Back in 2017, Russian Towers were going to buy the tower infrastructure of the operator VimpelCom (Beeline trademark), but the deal did not materialize. At the end of 2021, Vimpelcom sold its National Tower Company (NBK) to Service Telecom, another independent tower operator. The deal amounted to RUB 70.65 billion.
In the transaction with Service-Telecom, the NBK company was estimated at 11.7 EBITDA indicators (profit before taxes, interest on loans and amortization expenses). Managing Partner, UFG Private Equity Arthur Akopyan told CNews that at the conclusion of the transaction for the purchase of Russian Towers, the company was evaluated by similar multipliers.
According to Hakobyan, the era of consolidation has now begun on the tower infrastructure market. “In these conditions, it was necessary either to acquire someone or to sell, the shareholders of Russian Towers chose the second option,” Akopyan notes.