Independent tower owner, operator and developer IHS Holdings has completed the acquisition of 5 701 towers from mobile telecommunications operator MTN South Africa (SA) for R6.4-billion after receiving the necessary regulatory approval from the South African Competition Commission.
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 consortium.
“The closure of this acquisition is an important milestone in IHS’ growth story. Through this transaction, IHS has now entered the most industrialised economy in Africa as South Africa’s largest independent tower operator,” said IHS Towers chairperson and CEO Sam Darwish.
IHS now has an operational footprint in eleven emerging markets with seven in Africa and four in Latin America and the Middle East, with a global tower count of nearly 39 000 towers.
“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. Additionally, with this deal, we continue to deliver on our Asset Realisation Programme, strengthening the balance sheet and improving returns,” added MTN Group president and CEO Ralph Mupita.
Under the agreement, IHS Towers is also providing power management services to MTN SA on about 13 000 sites, including the acquisition portfolio, across South Africa.
Aligned to IHS Towers' existing service offering in other African markets, the power management services component of the transaction will be delivered to the acquired sites, as well as to other third-party sites on which MTN SA is present, and primarily involve power systems and security at sites.
The acquired assets as well as the provision of power management services across MTN SA’s portfolio are expected to deliver revenue and adjusted earnings before interest, taxes, depreciation and amortisation of about $192-million and $85-million, respectively, in the first full year of operations.
“MTN Group has been a long-term partner of IHS, and I am delighted that we will expand that collaboration and facilitate mobile connectivity in South Africa. We will leverage our deep operational excellence and engineering expertise, honed across our other African markets, to meet South Africa’s increasingly sophisticated data demands and expedite the roll-out of new technologies,” said Darwish.
“Over the years, MTN SA has built and maintained the best network in the country, and 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,” concluded MTN SA CEO Charles Molapisi.