IHS Towers to acquire South African telecom towers from MTN unit

U.K.-listed towers company IHS Holding Ltd. signed an agreement to acquire 5,709 telecommunication towers in South Africa from MTN Group Ltd. unit Mobile Telephone Networks (Proprietary) Ltd. for a cash consideration of 6.4 billion South African rand.

The acquisition will see IHS Towers owning about 70% of the South African towers business. IHS is also in advanced talks to acquire the remaining 30% from the B-BBEE consortium.

Under the deal, IHS Towers will provide Power-as-a-Service, or PaaS, to MTN at about 12,800 sites across South Africa, including the sites it agreed to acquire.

The transaction, including the provision of PaaS, is expected to provide IHS with revenue of about $220 million and adjusted EBITDA of about $80 million in the first full year of operations. Further growth is expected through a multiyear commitment for a portion of MTN's new towers.

IHS owns more than 30,500 towers across its nine markets, including Brazil, Cameroon, Colombia, Côte d'Ivoire, Kuwait, Nigeria, Peru, Rwanda and Zambia.

As of Nov. 16, US$1 was equivalent to 15.54 South African rand.