IHS towers buys MTN SA’s asset for $412m, now 3rd world largest operator

IHS Towers has completed a $412 million purchase of MTN Group’s assets, helping them achieve one of their goals in delivering power management services to MTN South Africa’s 13,000 locations.

Founded in 2001 by Lebanese-Nigerian, Issam Darwish alongside William Saad, IHS Holdings provides telecom tower infrastructure for mobile phone operators. The company leases tower spaces to mobile operators under a 10-15 year contract. It owns over 715 towers in Nigeria and 23,000 towers across Africa.

As a result, IHS Holdings is the third-largest mobile infrastructure provider in the world.

In the announcement made by the New York-listed company today, it said that it has successfully purchased 5,701 units of MTN’s towers after successfully meeting stringent conditions imposed by the regulator which mandated them to fulfil certain obligations upon the merger.

This was also confirmed by MTN’s President and CEO, Ralph Mupita. According to him, all “regulatory approvals and conditions precedent to the deal” has been finalised.

We are pleased to have IHS bring global capabilities to our South Africa network

Ralph Mupita, MTN”s CEO

Read Also: IHS Towers share price dropped by 18% after first day of its NYSE listing

The Bargain

Earlier in November 2021, when the deal was first initiated, MTN stated that the deal would only consider cash propositions amounting to ZAR6.4 billion ($412 million).

Through this transaction, IHS has now entered the most industrialized economy in Africa as South Africa’s largest independent tower operator with revenue from tower operations and power supply arrangements expected to exceed $200 million in the first full year.

Sam Darwish, CEO IHS Towers

The sale of the towers by MTN is part of an initial plan to raise money to pay down debt and simplify its portfolio of businesses that spreads across Africa and the Middle East. Recall that MTN sold its minority stakes in its tower joint ventures in Ghana and Uganda in January 2022.

Then, it raised about $523 million.

According to the CEO of IHS Towers, Sam Darwish, the deal represented an important milestone and growth path for the company. He said: “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.

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.”

Not only does the deal see IHS Towers provide power management services to MTN’s vast coverage in South Africa, but it will also see IHS Towers own 70% of the South African tower business. The remaining 30% is owned by a consortium with investors participating in the government’s Broad-based Black Economic Empowerment programme.

The achievement of the 30% black ownership within 24 months was a key requirement set by the Competition Commission.

IHS Tower’s continued expansion

The purchase is the latest in a series of similar deals recently sanctioned by IHS Towers, as part of its global expansion.

In December 2019, the company announced its acquisition of Cell Site Solutions (CSS), an infrastructure solutions provider in Brazil, which was part of its growth plan to expand towards countries in the Middle East, Asia and South America.

The company manages more than 30,000 towers in its existing portfolio. Its telecom infrastructure makes it possible for millions of people around Africa, Latin America and beyond to make phone calls and browse the internet.

The company also announced that it now has a presence in 11 emerging markets, including seven in Africa and four in Latin America and the Middle East, and that it operates about 39,000 towers globally.