Tower Operator Facing Hiring Dilemma After CEO Departs

As the Architect of Cellnex Telecom SA's Emergence as Europe's Biggest Tower Operator Prepares to Exit the Stage, the Board Must Choose Between Hiring Outside Talent or Naming an Experienced Insider to Consolidate the Spanish Firm's Growth.

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Tobías Martínez, who was responsible for Cellnex's rapid growth after its 2015 stock listing, will be leaving the company in June, it was announced on Wednesday. During his time with the company, Martínez oversaw acquisitions totaling more than €23 billion, and the Cellnex share price more than doubled.
The next CEO of Cellnex will have a difficult task ahead of them, as the company faces tighter financing conditions and higher interest rates. Cellnex has said that it is no longer pursuing growth through acquisitions, and is instead focusing on achieving an investment-grade rating.

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The tower operator added nearly 90,000 towers in seven years. This represents a significant increase in coverage and capacity for the operator.
The appointment of a new chief executive officer is a sign that Cellnex is committed to its strategic pivot, according to Jerry Dellis, an analyst at Jefferies. He said that if the new CEO is someone from outside the company, it would be a break from the past, but that the CFO was a driving force behind the strategic change.
The company's shares rose by 0.8% to €31.77 on Friday in Madrid.

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Cellnex's deal-making heyday may be coming to an end, as large buying opportunities have started to dry up. In July, the company dropped out of a race to buy Deutsche Telekom AG's towers, and in November it missed out on a chance to buy Vodafone Group Plc's masts unit.

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The next person in line for the position of CEO at Martinez Corporation will have their work cut out for them. Not only will they be tasked with delivering impressive results, but they'll also be responsible for steering the company in a new strategic direction. This is according to Ricardo Seixas, head of Iberian equities at Bestinver Asset Management.

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According to Seixas, while the market may value internal candidates such as Deputy CEO Àlex Mestre or CFO Aisa, they are also described as people who are experts in inorganic growth and M&A. The alternative option would be to tap someone with proven management control skills who wouldn't rely on acquisitions to expand the firm's footprint.

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The board will begin searching for a replacement around the same time that it awaits a periodic assessment of management from head-hunting firm Russell Reynolds.
Cellnex has said that it is aiming to receive an investment grade rating from S&P Global Ratings within 12 to 24 months. The company, which has more than €17 billion of debt, already has an investment grade rating from Fitch.

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Cellnex was born in 2015 from the spinoff of the telecommunications arm of the Abertis infrastructure group. It now operates nearly 105,000 sites across 12 countries, up from around 15,000 at the time of its initial public offering.

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Cellnex has sought to diversify its revenue sources in recent years by expanding into infrastructure related to masts, including fiber-to-tower and small data center connections, as well as more complex assets such as radio equipment and antennas.
According to Seixas, increasing the number of data centers or antennas can lead to more information and more maintenance. He believes that there is potential for more margin and income from this type of activity.