IHS Towers Signs Telecom Tower Acquisition Sale and Lease Back Agreement with MTN in South Africa
IHS Holding Limited (“IHS Towers”), one of the largest independent owners, operators, and developers of shared telecommunications infrastructure in the world by tower count, has signed agreements to acquire 5,709 telecommunication towers in South Africa from Mobile Telephone Networks Proprietary Limited (“MTN”), one of the leading mobile telecommunications operators in South Africa (the “Transaction”). IHS Towers will also provide Power-as-a-Service (“PaaS”) to MTN at approximately 12,800 sites across South Africa (including the acquired 5,709 sites).
Cash consideration in the Transaction is ZAR6.4 billion. The acquired assets as well as the provisions of PaaS across MTN’s portfolio are expected to deliver Revenue and Adjusted EBITDA of approximately US$220 million and US$80 million, respectively, in the first full year of operations (based on a current exchange rate). Further growth is expected through a multi-year commitment for a portion of MTN’s new towers.
Through the Transaction, IHS Towers will enter the most industrialized economy in Africa, which is a testament to the company’s commitment to maintaining its leadership position in Africa. IHS Towers will become the largest independent tower operator in South Africa as well as leveraging its operational expertise to invest in new infrastructure helping accelerate the roll-out of new technologies and delivering efficiencies for existing infrastructure.
IHS Towers will own 70% of the South African Towers business with the remaining 30% owned by a B-BBEE consortium. We are in advanced discussions with a consortium of B-BBEE investors, which will be completed in due course.
Sam Darwish, IHS Towers Chairman and CEO, commented “I am exceptionally proud to announce IHS’ creation of the largest independent tower operator in South Africa, which represents the start of a new chapter in South Africa’s telecommunications infrastructure sector. The country has a growing population of almost 60 million people and we are committed to utilizing our operational expertise to invest in the towers acquired and provide cutting edge power services where necessary.
Our long-standing relationship with MTN Group, coupled with our two decades of operation on the African continent and track record of delivering consistently strong network uptime, will enable us to deliver an infrastructure capable of meeting South Africa’s increasingly sophisticated data demands. Although we have expanded into new regions over the last two years, this agreement is testament to our continued commitment to facilitating mobile connectivity across the African continent. With this Transaction and our partnership with the Egypt Digital Company for Investment as announced last month, IHS now has a footprint in seven African markets, in addition to our four newer markets in Latam and MENA.”