Telus to sell 49% stake in cell tower unit to La Caisse

Executive Summary

• Telus Corp. has entered into a definitive agreement to spin off its wireless tower infrastructure into a newly formed entity, Terrion, in which La Caisse will acquire a 49.9% equity interest for approximately $1.26 billion.
• The transaction values Terrion at over $2.5 billion and is expected to reduce Telus's net debt by approximately $1.26 billion, accelerating the company's path toward a target net debt-to-EBITDA ratio of 3.0 times by 2027.
• Telus will retain a 50.1% controlling interest in Terrion and full ownership of all active network components, while Terrion will become Canada's largest dedicated wireless tower operator with roughly 3,000 sites.

Key Details

• Transaction Structure: Telus is carving out its passive macro wireless infrastructure (cell towers) into a new operator, Terrion LP. La Caisse (Canada's second-largest pension fund) is acquiring a 49.9% equity interest in Terrion LP and its general partner, Terrion GP Inc.
• Consideration: La Caisse is paying approximately $1.26 billion for the 49.9% stake.
• Valuation: The transaction values Terrion at over $2.5 billion.
• Ownership & Control: Telus retains a 50.1% equity interest and full ownership/control of all active network components and security systems. Telus will consolidate Terrion's results into its financial statements.
• Debt Impact: The proceeds will be used to accelerate deleveraging, reducing Telus's net debt by approximately $1.26 billion (approximately 0.17 times Telus's current net debt-to-EBITDA ratio).
• Asset Portfolio: Upon preclosing reorganization, Terrion will hold roughly 3,000 tower sites across British Columbia, Alberta, Ontario, and Quebec, including coverage in six of Canada's top seven metropolitan areas.
• Lease Agreement: Terrion will enter into a lease agreement with Telus for capacity on the towers for an initial period of eight years, with renewal options thereafter.
• Financial Status at Closing: Aside from existing leases, Terrion will be unlevered at closing.
• Strategic Purpose: The partnership establishes Terrion as Canada's largest dedicated wireless tower operator, enabling wholesale access and third-party co-location to support national wireless competition. It allows Telus to focus on innovative service offerings while Terrion specializes in infrastructure development.
• Leadership: Eros (Woody) Spadotto has been appointed CEO of Terrion.
• Regulatory & Timeline: The transaction is subject to regulatory approvals and customary closing conditions, expected to be received before the end of Q3 2025.
• Advisers:
  • Telus: TD Securities Inc. (financial adviser); Osler Hoskin & Harcourt LLP and Allen Overy Shearman Sterling LLP (legal advisers).
  • La Caisse: Stikeman Elliott (legal adviser); National Bank Financial Markets (financing matters).

Notable Quotes

• Darren Entwistle, President and CEO of Telus: "This transformative partnership unlocks significant value for Telus shareholders and enhanced connectivity for our customers. Notably, it accelerates our path toward our target net debt-to-EBITDA ratio of 3.0 times by 2027 while supporting Canada's global leadership in wireless connectivity."
• Emmanuel Jaclot, Executive Vice-President and Head of Infrastructure at La Caisse: "With this investment, we are partnering with Telus to establish Canada's largest dedicated wireless tower operator, an important step in strengthening the country's digital connectivity and mobile network resilience."
• Eros (Woody) Spadotto, CEO of Terrion: "We are privileged to partner with La Caisse... With nearly 3,000 sites -- including coverage in six of the country's top seven metropolitan areas -- we are proud to become Canada's leading dedicated tower company."