TPG (a leading global alternative asset management firm) and Peppertree Capital Management (a leading specialized digital infrastructure investment firm with a focus on wireless communications towers) announced recently that they have entered into a definitive agreement under which TPG will acquire the Peppertree business in a cash and equity transaction estimated to include up to $242 million in cash and up to $418 million in equity, payable at closing, subject to certain adjustments. The deal also includes earnouts based on Peppertree’s future performance, valued at up to $300 million.
What Peppertree does: Launched in 2004 and with $7.7 billion in assets under management, Peppertree invests in wireless communications towers and related critical communication infrastructure assets to address evolving network and data demand worldwide. And Peppertree has made over 175 investments through ten flagship funds, supporting the construction and acquisition of over 10,000 wireless communication infrastructure assets as a preferred capital source to developers.
As a strategic partner to tower developers, Peppertree is also well-positioned to identify new tower development and expansion opportunities across key markets and adjacent network-related assets, including spectrum licenses, fiber networks, distributed antenna systems, small cells, and ground and rooftop rights. And the firm has achieved significant growth since inception, while maintaining strong performance and significant fundraising momentum through various market cycles.
Leadership team: Peppertree Co-Presidents Howard Mandel and Ryan Lepene will continue to lead Peppertree’s investing strategy, with additional support from TPG, along with Peppertree’s existing team of experienced investment and operational professionals.
Upon the closing of the deal, Peppertree will provide TPG immediate scale in wireless communications tower and network infrastructure development, a core subset of the growing digital infrastructure sector. And this scale is expected to be highly complementary to TPG’s existing cross-platform leadership in the Internet, Digital Media & Communications (IDMC) sector. TPG and Peppertree have a combined AUM of $253.6 billion on an as adjusted basis, and the deal is expected to be immediately accretive to TPG’s fee-related earnings and after-tax distributable earnings per share upon closing.
Advisors: BofA Securities, Goldman Sachs, Houlihan Lokey, and Campbell Lutyens acted as financial advisors to TPG, and Weil, Gotshal & Manges served as TPG’s transaction counsel. And Evercore acted as financial advisor to Peppertree, and Kirkland & Ellis served as Peppertree’s transaction counsel.
KEY QUOTES:
“With its deep industry expertise, talented team, and portfolio of high-quality assets, Peppertree represents TPG’s further expansion into the digital infrastructure space, where we see significant potential to grow our capabilities over time. This transaction underscores our continued focus on strategic growth into new segments of alternative asset management where we have a competitive advantage, creating new investment opportunities for our clients and driving value for our shareholders. The Peppertree team shares our commitment to entrepreneurship, innovation, and investing excellence, and we look forward to welcoming them to TPG at an exciting time for our firm.”
Jon Winkelried, Chief Executive Officer of TPG
“Over the last two decades, Peppertree has built deep relationships with our portfolio companies and investors, helping them effectively navigate the evolving wireless network landscape and respond to surging data demand. Joining TPG’s global alternatives platform will provide us with the additional scale and resources needed to capitalize on significant opportunities across the markets we operate in. We look forward to joining TPG’s world-class team and continuing to invest in high-quality digital infrastructure assets, while delivering meaningful value for our investors and development partners, and growth opportunities for our employees.”
Peppertree Co-Presidents Mandel and Lepene
“Our increasingly connected world requires wireless networks and supportive communication infrastructure capable of delivering fast, reliable, and secure data transmission. Peppertree’s track record of investing in high-quality wireless communications towers and critical digital infrastructure assets, combined with TPG’s thematic investing approach and legacy of scaling innovative internet and communications companies, positions us to leverage our collective insights and expertise to build high-quality, growing digital infrastructure-related businesses.”
David Trujillo and John Flynn, Partners at TPG
