La Caisse de dépôt et placement du Québec (“CDPQ”), one of North America’s largest institutional investors, and global investment manager AMP Capital announce that they will provide US$500 million of financing to Tillman Infrastructure (“Tillman”), an American developer and owner of telecommunication tower infrastructure. This initial investment will help finance the construction of new telecommunications towers across the United States. These new structures will satisfy demand for coverage in additional locations, provide new service opportunities for carriers, and increase the overall communications infrastructure in the U.S. Under this agreement, the investment could eventually reach up to US$1 billion based on future growth needs.
Founded in 2016 and based in New York, Tillman builds, owns and operates a portfolio of cell towers, which are core infrastructure assets used by wireless carriers to relay their cellular signals to mobile subscribers.
Tillman began construction on its first sites in late 2017 and is actively building in over three dozen states across the U.S.
In the next few years, mobile service providers plan on spending 15 to 20% of their revenue on capital expenditure to meet the growing demand from consumers and to cater to ever-increasing mobile data traffic. This represents approximately US$40 billion in yearly investment. M&A activity within the sector is expected to increase the expenditure of telecom companies looking to capture the significant potential of 5G and the data market.
Marc Cormier, Executive Vice-President, Fixed Income at CDPQ, said: “With Tillman’s strong leadership and seasoned experts, along with our partner AMP Capital, we look forward to contributing to Tillman’s great potential. It has a competitive product that delivers coast-to-coast speed and efficiency. The company will only continue to benefit from a growing demand for data that will drive mobile infrastructure spending and development for years to come.”
AMP Capital Infrastructure Debt Partner Patrick Trears said: “With the investment in Tillman, we are pleased to add another terrific asset to the portfolio for our investors around the world. We see strong value in the North American telecommunications infrastructure market and expect it will be a driver of future growth for our platform. The proliferation of data globally will see an increasing demand for telecommunication infrastructure and Tillman is well-positioned to capitalise on the growth opportunity. The transaction marks the second investment in telecommunications infrastructure in the region since the close of AMP Capital’s Infrastructure Debt Fund III last year and highlights the strength of our partnerships with leading institutional investors like CDPQ.”
Tillman Infrastructure Chief Financial Officer, Suruchi Ahuja said: “We are excited to have found great partners in CDPQ and AMP Capital to fuel the next stage of our aggressive growth plans. We are committed to continue to be the carrier friendly and carrier preferred infrastructure provider, and a true partner to our customers as they focus on expanding their coverage and capacity across the nation.”
Q Advisors, a global TMT investment banking boutique, acted as the exclusive financial advisor to Tillman.