Information on the Target

Lyntia Networks is a prominent wholesale operator in the Spanish telecommunications sector and the sole neutral provider that offers both lit and dark fibre, solidifying its position as the market leader. The company boasts a comprehensive nationwide fibre network exceeding 43,000 km, primarily established alongside electric power and gas distribution infrastructure. This extensive network positions Lyntia as one of the largest suppliers of neutral connectivity in Spain, catering particularly to large clients through long-term contracts with reputable companies.

Lyntia Networks delivers long-haul accessibility, connecting around 2,700 metropolitan zones and underserved small to medium-sized towns, in addition to coastal regions, which minimizes competition in its operational landscape. Post-transaction, José Antonio López will continue to serve as CEO of Lyntia Networks, while Eduardo Taulet will retain his role as CEO of Lyntia Access, a business segment under Antin Infrastructure Partners focused on providing wholesale Fibre to the Home (FTTH) services.

Industry Overview in Spain

The telecommunications industry in Spain is experiencing dynamic growth, driven by an increasing demand for high-speed internet connectivity and digital services. The rise in remote work, digital entertainment, and online learning has significantly propelled the need for robust telecommunications infrastructure. Consequently, operators must expand their networks to meet the growing demand for data.

Spain's telecommunications market has seen recent advancements with increased investments in fibre-optic infrastructure, aimed at improving service delivery in both urban and rural areas. The landscape is characterized by intense competition among several key players, all vying to enhance their service offerings and cater to the evolving needs of consumers.

With government initiatives and regulatory commitments to boost broadband access and quality, the Spanish telecommunications sector is well-positioned for extensive growth. This framework supports innovations in technology and efficiency, allowing businesses to explore new revenue streams and market opportunities.

Moreover, the rise of smart cities and Internet of Things (IoT) applications alongside the deployment of 5G technology further underscores the industry's expansion, marking a pivotal shift towards more interconnected communities and economic development. As a result, stakeholders within the sector are strategically aligning their operations to seize these transformative growth opportunities.

The Rationale Behind the Deal

The acquisition of Lyntia Networks is aligned with AXA IM Alts and Swiss Life Asset Managers' strategic focus on infrastructure investments that cater to the demands of the 21st century. The partnership aims to enhance the quality of internet services in Spain, ensuring reliability and connectivity as the nation moves towards a gigabit society. By combining resources and expertise, the deal is expected to unlock value for clients while fostering innovation throughout the optical fibre network.

Furthermore, the transaction allows the new investors to leverage their experience in digital infrastructure to enhance Lyntia's capabilities and enhance its market position in response to the growing telecommunication needs.

Information About the Investor

AXA IM Alts is a leading global player in alternative investments, managing approximately €183 billion in assets. It focuses on real assets, including private real estate, private debt, infrastructure, and alternative credit. With a commitment to responsible investment practices, AXA IM Alts integrates ESG criteria into its decision-making processes to build a sustainable portfolio that supports environmental and social goals.

Swiss Life Asset Managers, with over 160 years of experience in asset management, has been instrumental in shaping investment strategies that align with the evolving landscape of infrastructure investment. Their expertise enables them to identify compelling opportunities in telecommunications and ensure robust returns for their stakeholders while supporting the long-term growth objectives of their investments.

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The acquisition of Lyntia Networks can be regarded as a promising investment for both AXA IM Alts and Swiss Life Asset Managers, especially given the strong growth trajectory of the telecommunications sector in Spain. The investment solidifies their presence in a strategically vital niche of digital infrastructure, allowing them to contribute to the enhancement of broadband access and quality across the nation.

Moreover, the existing long-term contracts with blue-chip companies provide a solid revenue foundation, reducing exposure to market volatility and ensuring steady cash flows. This level of commitment from established clients signals a robust business model that can withstand changing market conditions.

However, it is essential to remain vigilant regarding potential regulatory changes and market competition. The telecommunications industry is susceptible to rapid technological advancements, and maintaining a competitive edge will require a continuous investment in innovation and infrastructure improvements. As Lyntia Networks aims to expand its services and reach, it will need to adapt to these shifts effectively.

In conclusion, the deal appears to be a well-considered investment given the strategic alignment of the investors, the strong market fundamentals in Spain, and Lyntia Networks' leading position. While potential challenges should be recognized, the collaboration is well-positioned to capture significant opportunities and drive value in the digital infrastructure space over the coming years.

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