MTN completes $412m deal to sell 5,701 towers to IHS
IHS Towers has completed the acquisition of 5,701 towers in South Africa from MTN, in a deal valued at 6.4 billion South African rand (US$412 million) that makes it the country’s biggest tower operator.
IHS Towers will own 70% of the South African towers business with the remaining 30% to be owned by a Broad-based Black Economic Empowerment (B-BBEE) consortium.
Ralph Mupita (pictured), MTN group president and CEO, commented: “With the regulatory approvals and all conditions precedent to the deal finalised, we are pleased to have IHS bring global capabilities to our South Africa network.”
The $412 million excludes lease liabilities estimated to be 4.6 billion rand ($296 million), said IHS , which said the acquired assets as well as the provision of power management services across MTN’s portfolio are expected to deliver revenue and adjusted EBITDA of approximately $192 million and $85 million, respectively, in the first full year of operations.
MTN said it “will only be providing power pass through on the towers being acquired, and not on those owned by third parties”.
Sam Darwish, IHS Towers chairman and CEO, said: “The closure of this acquisition is an important milestone in IHS’s growth story. IHS was founded in Africa and the region continues to be a key anchor for our company.”
The power management services component of the transaction is aligned to IHS Towers’ existing service offering in other African markets. This service will be delivered to the acquired sites, as well as to other third-party sites on which MTN is present. “This service will primarily involve power systems and security at sites,” said IHS.
The tower company said: “With this acquisition, IHS now has an operational footprint in 11 emerging markets with seven in Africa, in addition to four in Latin America and the Middle East, with a global tower count of nearly 39,000 towers.”
Darwish said: “Through this transaction, IHS has now entered the most industrialized economy in Africa as South Africa’s largest independent tower operator.”
Mupita said: “With this deal, we continue to deliver on our asset realization programme, strengthening the balance sheet and improving returns.”
Charles Molapisi, CEO of MTN South Africa, said: “We believe that in IHS, we have found a partner with the necessary experience and expertise to maintain and enhance this critical part of the business. This international partnership also brings foreign investment into the market to create greater competition.”