African telecommunications infrastructure company IHS Holding Ltd has agreed to acquire 5,709 telecom towers in South Africa from Mobile Telephone Networks Proprietary Ltd (MTN) for ZAR6.4 billion ($410 million) in cash.
IHS Holding, which operates as IHS Towers, will also provide Power-as-a-Service (PaaS) to MTN at 12,800 sites, including the acquired 5,709 sites, across South Africa.
IHS said the acquired assets as well as the provisions of PaaS across MTN’s portfolio will likely deliver revenue and adjusted EBITDA of about $220 million and $80 million, respectively, in the first full year of operations (based on a current exchange rate).
The transaction will help IHS Towers enter the most industrialized economy in Africa and make it the largest independent tower operator in South Africa.
IHS Towers will own 70% of the South African towers business with the remaining 30% owned by a B-BBEE (Broad-based Black Economic Empowerment) consortium. The firm said it is in advanced discussions with a consortium of B-BBEE investors, which will be completed in due course.
“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,” said Sam Darwish, IHS Towers chairman and CEO.
Emerging markets-focused IHS Towers has more than 30,500 towers across its nine markets, including Brazil, Cameroon, Colombia, Côte d’Ivoire, Kuwait, Nigeria, Peru, Rwanda and Zambia.
Meanwhile, in a parallel but separate transaction, JSE-listed MTN said it was moving ahead with its previously announced plan to exit Middle East.
MTN currently has more than 277 million customers in 20 markets across Africa and the Middle East.
In August 2020, MTN Group announced its intention to exit the Middle East in the medium-term to focus on its pan-African strategy, simplify its portfolio and reduce risk. MTN has now agreed to exit its operations in Yemen through a transfer of its stake to Emerald International Investment LLC, a subsidiary of Zubair Investment Center LLC.
Zubair is an affiliate of Zubair Corporation LLC, which is a minority shareholder in MTN Yemen.
MTN Yemen had 4.7 million subscribers at the end of September and operates on a 2G licence, which is due for renewal on December 31.