MTN South Africa has completed a sale of $410-million in an IHS Holding Limited (IHS Towers) acquisition of 5,701 towers in South Africa from the mobile telecommunications company.
Under the agreement, IHS Towers is also providing Power Management Services to MTN SA on approximately 13,000 sites, including the acquisition portfolio, across South Africa. IHS Towers is one of the largest telecommunications infrastructure providers in Africa.
The acquired assets as well as the provision of Power Management Services across MTN SA’s portfolio are expected to deliver Revenue and Adjusted EBITDA of approximately US$192 million and US$85 million, respectively, in the first full year of operations. This transaction has received the necessary regulatory approval from the South African Competition Commission.
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 SA is present. This service will primarily involve power systems and security at sites.
IHS Towers will own 70% of the South African Towers business with the remaining 30% to be owned by a B-BBEE consortium.
With this acquisition, IHS now has an operational footprint in eleven 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.
“The closure of this acquisition is an important milestone in IHS’ growth story. IHS was founded in Africa and the region continues to be a key anchor for our company. Through this transaction, IHS has now entered the most industrialised economy in Africa as South Africa’s largest independent tower operator,” IHS Towers Chairman and CEO, Sam Darwish, said.
“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,” Darwish added.
Ralph Mupita, MTN Group President and CEO said they are pleased to have IHS bring global capabilities to the South African network.
“With this deal, we continue to deliver on our Asset Realisation Programme, strengthening the balance sheet and improving returns,” Mupita added.
“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,” Charles Molapisi, MTN SA CEO, said.