Helios Towers plc, the independent telecommunications infrastructure company, has signed agreements with Airtel Africa Group to acquire its passive infrastructure operating companies in Madagascar and Malawi and enter into exclusive memorandum of understanding arrangements for the potential acquisition of its passive infrastructure assets in Chad and Gabon, all subject to required regulatory approvals.
The total consideration for the acquisition of the passive infrastructure companies in Madagascar and Malawi is expected to be $108 million, which represents an enterprise value of $124 million including estimated transaction costs and capitalised ground leases for the Group. These assets are expected to generate revenues of $38 million and Adjusted EBITDA of $13 million in the first full year of ownership.
In addition, Helios Towers has received a BTS commitment from Airtel Africa representing an additional 195 sites over the three years upon completion for which a further $11 million of deferred consideration and $24 million growth capex are expected to be invested by the Group.
“We are delighted to announce these acquisitions which, alongside the previously announced entry into Senegal, means we will deliver on our 2025 ambition to increase our operational presence to at least eight markets well ahead of schedule and represents a significant step towards our target of 12,000+ sites.”
Kash Pandya, Chief Executive Officer of Helios Towers
In the year to 31 March 2020 the passive infrastructure companies being acquired in Madagascar and Malawi generated net profit before tax of $3 million with a reported gross asset value of $94 million.
In line with Malawian local telecommunications infrastructure licence requirements, the Group’s Malawian operating company is expected to obtain a 20% local Malawian shareholding which will be maintained during the term of Helios Towers’ operating licence in Malawi. This will be effected at closing.
The Group expects to disclose consideration details for Chad and Gabon upon signing of the acquisition agreements in each market.
Markets Overview
Similar to Helios Towers’ other markets, Madagascar, Malawi, Chad and Gabon represent compelling markets for telecoms with a combination of a young, growing and increasingly urbanised populations plus high GDP growth, with each market forecast to deliver GDP CAGRs of 4% – 6% over the next five years (IMF, October 2020). These dynamics will continue to drive increasing demand for mobile communications and consequently the infrastructure supporting it.
“Additionally, as a result of service contract structuring and market selection, our hard-currency revenues and adjusted EBITDA will improve further, providing enhanced future stability for the business and complimented by the 12-year service contracts with Airtel Africa. We look forward to strengthening our relationship with Airtel Africa and the other MNOs by delivering exceptional services levels in these markets over the coming years, driving the sustainable growth of communications across Africa.”
Kash Pandya, Chief Executive Officer of Helios Towers
To support the anticipated expansion into new markets, Helios Towers completed an internal reorganisation in H2 2020, creating a new regional CEO structure and dedicated new markets team. This reorganisation supports the Group’s ongoing geographic and operational expansion characterised by the previously announced entry into Senegal, these Transactions and other potential future acquisitions.
