African Telecom Tower Firm, IHS, to Buy Helios Towers Nigeria

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THISDAY SPECIAL RELEASE
Obinna Chima
IHS Holding Limited (IHS), one of the largest mobile telecommunications infrastructure providers in Africa, Europe and the Middle East and Helios Towers Nigeria Limited (HTN), the pioneer of tower infrastructure sharing in Africa, yesterday announced that they have entered into an agreement that will see IHS acquiring HTN’s portfolio of 1,211 diversified tower sites throughout Nigeria.

HTN and IHS established the mobile telecommunications infrastructure industry in Nigeria in the early 2000s and the transaction will be the first in-market consolidation in Africa.

HTN is a leading tower operator in Nigeria and the first independent tower operator in Africa. Currently operating in 34 of 36 states in Nigeria and the Federal Capital Territory, with over 1,200 towers and over 2,500 technology tenants.

HTN is also an ISO 9001:2008 certified company and is recognised and trusted by its customers for its delivery of best-in-class services and efficiency.

According to a statement from IHS, the transaction will allow the continued delivery of best-in-class solutions to customers and additional investments in infrastructure upgrades.

IHS is the largest mobile telecommunications infrastructure provider in Africa, Europe and the Middle East. Founded in 2001, IHS provides services across the full tower value chain – co-location on owned towers, deployment and managed services.
Today, IHS owns over 23,300 towers in Nigeria, Cameroun, Côte d’Ivoire, Zambia and Rwanda.

Under the terms of the transaction and subject to requisite regulatory approvals, IHS will acquire the entire issued share capital of HTN from HTN Towers Plc, which is ultimately owned by Helios Investment Partners, Pembani Group, First City Monument Bank and other minority shareholders.

Upon completion of the transaction, IHS will have full operational control of the underlying businesses and will market independent infrastructure sharing services to mobile network operators and internet service providers in Nigeria.

IHS explained that business will continue as usual for HTN’s towers which will be seamlessly integrated into the IHS network and connected to IHS’s state of the art network operating centre which monitors each tower 24 hours a day, seven days a week. The transaction is expected to close in the second quarter of 2016.

IHS stated that it remained committed to maintaining its existing relationship and position with bondholders, adding that the company believes that the benefits of the transaction would extend to all stakeholders.

Its shareholder base includes global institutional investors such as Wendel, GIC, IFC, ECP and KIC, and the strength of IHS’ balance sheet enhances the HTN credit profile, the statement added.

According to the statement, the net leverage position of the combined entity was likely to be approximately 50 per cent lower than the current HTN stand-alone leverage position.

In addition, it pointed out that there are meaningful synergies that its management believes would be derived from the transaction given that a considerable part of the IHS portfolio is located in Nigeria.

“With a population of nearly 180 million people, increasing smartphone penetration and limited fixed line infrastructure, Nigeria’s vibrant wireless industry is poised for a sustained period of network investment and growth.

“This transaction strengthens IHS’ position as the market leading tower company in Nigeria and provides IHS the opportunity to optimise a larger portfolio through innovative green energy solutions and delivery of market leading quality of service,” the statement added.

Commenting on the transaction, the chief executive officer of HTN, Inder Bajaj said: “We have built a unique urban centric portfolio across Nigeria with the highest tenancy ratio in the industry and a diversified tenant mix.

“IHS is the natural buyer of our business and we believe their deep knowledge and extensive experience in the sector will help to continue the strong level of customer service already being achieved by HTN.”

Also, the executive vice chairman and group chief executive of IHS, Issam Darwish said: “This transaction is significant in that it combines Africa’s two original tower companies and will enable us to strengthen our service offering to our customers, while focusing on their needs.

“We remain committed to the Nigerian tower market where coverage levels are yet to mature and explosive data growth continues. The growing data traffic and increased smartphone use present an exciting market opportunity for IHS, with the potential for up to 40,000 more towers required to meet this demand.

“Transactions such as the acquisition of HTN have allowed IHS to create significant local, technical and engineering employment opportunities throughout Africa.
“Over 95 per cent of IHS’s employees are African and IHS employs close to 40,000 people directly and indirectly through its exclusive subcontractors.”
The statement added that IHS and HTN were advised by UBS and Citigroup, respectively.