Out-Law News 2 min. read
22 Mar 2016, 10:58 am
Under the terms of the agreement, which is subject to regulatory approvals, IHS said it will acquire the entire issued share capital of HTN from HTN Towers Plc, which is ultimately owned by Helios Investment Partners, South Africa’s private equity Pembani Group, Nigeria-based First City Monument Bank and other minority shareholders.
On completion of the transaction, which is expected to close in the second quarter of this year, IHS said it will “have full operational control of the underlying business and will market independent infrastructure sharing services to mobile network operators and internet service providers in Nigeria”.
IHS said: “The net leverage position of the combined entity is likely to be approximately 50% lower than the current HTN stand-alone leverage position. In addition, there are meaningful synergies that management believes will be derived from the transaction given a considerable part of the IHS portfolio is located in Nigeria.”
“Business will continue as usual for HTN’s towers which will be seamlessly integrated into the IHS network and connected to IHS’ state-of-the-art network operating centre which monitors each tower 24 hours a day, seven days a week,” IHS said. “HTN and IHS established the mobile telecommunications infrastructure industry in Nigeria in the early 2000s and this transaction will be the first in-market consolidation in Africa.”
IHS, founded in 2001, said it currently owns more than 23,300 telecoms towers in Nigeria, Cameroon, Cote d’Ivoire, Zambia and Rwanda. The company’s executive vice-chairman and group chief executive officer (CEO) 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.”
Darwish said: “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 presents an exciting market opportunity for IHS, with the potential for up to 40,000 more towers required to meet this demand.”
HTN, which describes itself as “the first independent tower operator in Africa”, said it currently operates in 34 of 36 states in Nigeria and the country’s central Federal Capital Territory, with more than 1,200 towers and over 2,500 technology tenants.
HTN’s CEO Inder Bajaj said IHS was “the natural buyer of our business”. “We have built a unique urban centric portfolio across Nigeria with the highest tenancy ratio in the industry and a diversified tenant mix.”
According to IHS, “Nigeria’s vibrant wireless industry is poised for a sustained period of network investment and growth with a population of nearly 180 million people, increasing smartphone penetration and limited fixed line infrastructure”.
Last year, a deal was completed for the sale and lease back of 949 telecommunications towers in Zambia from Airtel Zambia to IHS. IHS said then that the move aimed to “further promote network sharing” and boost the delivery of higher quality mobile services in the region.
A joint report published in 2012 by the World Bank and African Development Bank, with support from the African Union, said that, at the start of 2012, Africa’s mobile telephony market was “bigger than either the EU or the US. Some 68,000 kilometres of submarine cable and over 615,000 kilometres of “national backbone networks” had already been laid to boost connectivity across the continent, the report said.
The Boston Consulting Group said last year that the value of sub-Saharan Africa’s mobile money market could grow to $1.5 billion over the next four years as Africa’s ‘unbanked’ use their phones for a variety of financial transactions. The group said the region was adopting mobile financial services “at a pace seen in few other places, presenting banks and mobile-network operators with a set of strategic choices that will go a long way toward determining their success in the region”.
