Connexa completes acquisition of 2degrees’ passive mobile tower assets

The intention to acquire the assets was announced in December 2022, by Connexa and Ontario Teachers’ Pension Plan (Ontario Teachers’), Connexa’s largest shareholder.

The assets acquired by Connexa and divested by 2degrees comprise 1,124 mobile tower sites throughout New Zealand, including a number of in-flight sites to be delivered by 2degrees in 2023. The addition of 2degrees’ towers means Connexa’s tower network comprises more than 2,350 towers throughout New Zealand.

Connexa was formed in July 2022, with the acquisition of a 70% stake in Spark New Zealand's ("Spark") passive mobile tower infrastructure assets by Ontario Teachers’, with Spark retaining 30%. That transaction was completed in October 2022.

Following this latest acquisition, Ontario Teachers’ shareholding in Connexa rises to approximately 83% and Spark’s shareholding dilutes to around 17%.

Connexa chief executive Rob Berrill says the completion of the transaction follows regulatory approvals from the Commerce Commission and the Overseas Investment Office.

“We’re very pleased to complete this transaction with 2degrees which underscores Connexa’s vision to be New Zealand’s most comprehensive, efficient and sustainable tower network. We look forward to enabling a more connected digital future for Aotearoa as its demand and reliance on digital connectivity continues to grow,” he said.

Ontario Teachers’ senior managing director and head of Asia Pacific Infrastructure & Natural Resources Bruce Crane says the completion of the transaction establishes Connexa as New Zealand’s leading mobile tower infrastructure network.

“We are pleased to close this transaction and increase our ownership stake in Connexa. We are committed to supporting Connexa as it significantly expands its digital infrastructure platform in the years to come to meet New Zealand’s growing mobile and data demand needs,” he said.

Under the terms of the deal, 2degrees has entered into a 20 year-agreement with Connexa (plus rights of renewal) to secure access to existing and new towers. This includes an additional tower build and co-location commitment of 450 sites for 2degrees over the next 10 years.

2degrees chief executive Mark Callendar says the divestment of its passive tower assets supports the mobile operator’s strategy in New Zealand.

“We’re delighted to realise value from these assets, which will allow us to continue to invest in innovative solutions and services for Kiwis.

“You’ll continue to see laser focus on growth and value-added services from 2degrees, along with acceleration of a digital-first customer experience, and new product development.

“We look forward to working closely with Connexa as a specialist tower company focused on building out its network, including in areas that will support 2degrees’ future growth and development,” he said.

The significant forward build for 2degrees by Connexa is in addition to the country’s largest forward-committed new site build programme by Connexa for Spark. Connexa has committed to building a further 670 sites over the next ten years to support Spark’s mobile services.

Mr. Berrill said that Connexa was focused on delivering for its mobile operator customers to improve the efficiency and resilience of mobile tower assets in New Zealand.

“In addition to ongoing network expansion, our investment plans are focused on improving capacity and capability right across our network of towers,” he said.

“Mobile digital connectivity is increasingly an essential service in New Zealand and we look forward to working with our mobile network operator customers to ensure the latest in mobile digital technology is even more reliable and widely available.”