Telecommunications company Vodafone has sold its network of mobile phone towers for $1.7 billion to a group of investment funds.
British based InfraRed Capital Partners, part of the Sun Life insurance group, and Northleaf Capital Partners of Canada, will each take 40 percent, with Vodafone half owner Infratil taking 20 percent.
Infratil's chief executive Jason Boyes said Vodafone has turned out to be an astute and profitable investment.
"We are delighted with this outcome, which highlights again why Vodafone is an excellent Infratil investment. We have unlocked a significant portion of the value of our original equity invested in Vodafone, whilst retaining that investment and a 20 percent stake in TowerCo."
Vodafone will have a 20-year right of use of the network of 1484 towers, and will retain ownership of the active assets such as the cell phone transmission equipment.
The new tower owning company will build at least 390 additional sites.
Vodafone said the tower sale would give it funds for future investment in hardware and services.
The sale price was equated to 33.8 times of Vodafone's operating earnings, a similar ratio as Spark's $900 million sale of a 70 percent stake in its towers last week.
Morrison and Co, which manages Infratil and brokers many of its deals, said taking a 20 percent stake in the new towers' company gave it an interest in an asset that was hard to replicate.
"What makes this an attractive Infratil asset is that while it has long-term, inflation linked cashflows, it is also a platform with significant growth opportunities including macro tower growth, capacity for future co-tenancy, increased demand for new points of presence and step out opportunities such as small cells," Morrison's chief investment officer Will Smales said.
The sale requires Overseas Investment Office approval and is expected to be finalised towards the end of the year.