Private equity giant KKR & Co has made its second infrastructure investment in the Philippines with the acquisition of an undisclosed stake in Pinnacle Towers, a telecommunications builder and operator that seeks to build telco towers in the country.
In a statement, KKR said it made the investment in Pinnacle Towers through its infrastructure fund, marking its fourth overall investment in the Philippines market. Financial details of the investment were not disclosed.
In June, the PE major had agreed to acquire about 11.9 per cent in the listed Philippines power developer First Gen Corp for $192.2 million. The acquisition was carried out by Singapore-based Valorous Asia Holdings, a wholly-owned subsidiary of KKR.
Pinnacle aims to build an independent telecom tower platform in the Philippines to help telcom firms meet the demand for reliable, data-rich, high-speed, and affordable connectivity.
Its local subsidiary, Frontier Tower Associates Philippines (FTAP), is one of the first independent tower companies in the country to secure a provisional licence to operate.
David Luboff, partner and head of Asia Pacific Infrastructure at KKR, noted that the Philippines’ telecom sector has grown rapidly in the past few years on the back of increasing demand for connectivity. This, he added, has led to the need to expand existing infrastructure to allow operators to provide better service and coverages.
“Our investment in Pinnacle reiterates our commitment to addressing this need and supporting the Philippines’ transition to a connected, digital nation,” Luboff stressed.
Southeast Asia is a key part of KKR’s Asia infrastructure strategy, and KKR’s investment in Pinnacle further boosts the firm’s track record as an active investor in Southeast Asia across asset classes.
Aside from First Gen and Pinnacle, KKR has also invested in Metro Pacific Hospitals, the country’s largest private hospital operator and healthcare network, and in Voyager Innovations, a technology company.
KKR has so far raised approximately $13 billion for its fourth Asia-focused buyout fund, which is already a record figure and the largest pan-Asia private equity fund in the world.
Pinnacle Chairman and CEO Patrick Tangney said KKR’s investment comes at a pivotal time as the Philippines is one of the world’s fastest-growing and most dynamic mobile markets.
“Together with KKR, we look forward to furthering our goal of providing high-quality telecom infrastructure solutions that improve the lives of mobile users in the Philippines and other relevant markets in Asia Pacific,” Tangney said.
The investment also comes as President Rodrigo Duterte has appealed anew to telcos to improve their services. In July, he urged the existing telco companies to improve their services in the next five months or the country will do away with them.