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Telecommunications infrastructure company, Helios Towers, has signed agreements with Airtel Africa Group companies to acquire its passive infrastructure operating companies in Madagascar and Malawi.
Helios Towers also signed memorandum of understanding arrangements for the potential acquisition of Airtel Africa’s passive infrastructure assets in Chad and Gabon, all subject to required regulatory approvals.
A statement from Helios states that there are two separate agreements, one for each market, for the infrastructure acquisition in Madagascar and Malawi for a total expected consideration of $108 million which represents an enterprise value of $124 million including estimated transaction costs and capitalised ground leases for the Group.
Commenting on the transactions, Helios Towers CEO Kash Pandya said, “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 this represents a significant step towards our target of 12,000+ sites.”
“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,” added Pandya.
The transactions assets are expected to generate aggregated annualised revenues of $89 million and adjusted EBITDA of $27 million (in the first full year of ownership), with further growth anticipated through 315 committed build to suits (BTS) and colocation lease-up.
There are 2,227 existing sites across Madagascar, Malawi, Chad and Gabon and upon and subject to completion, Helios Towers will become the largest independent telecommunications infrastructure company in each of the countries including strong market share in Madagascar.
Helios Towers has also 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 company.
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.
According to Malawian local telecommunications infrastructure licence requirements, Helios’ 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.
The Group expects to disclose consideration details for Chad and Gabon upon signing of the acquisition agreements in each market.
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