Mobile phone towers valued at $7bn in New York

IHS Holding Ltd (ticker IHS:US), holding company of the biggest independent operator of mobile phone towers in Africa, scored a $7 billion valuation in its initial public offering (IPO) on the New York Stock Exchange on 14 October. According to a story on website, Africa scores “eight unicorns and counting”, referring to technology companies that are valued at over $1bn each.

The IPO was for 22.5m shares at $21 per share, raising $378m for existing shareholders and for growth. This was at the bottom of the pricing range, which had initially been set for $21-$24.

Since the offer the share has retreated and by close of business on 21 October was $17.08.

IHS Towers is the biggest African market capitalization in the USA. It is the fourth largest independent multinational tower company in the world and the largest to focus only on emerging markets.

London-based IHS operates more than 30,200 towers in Nigeria, Cameroon, Côte d’Ivoire, Zambia and Rwanda as well as three markets in South America and one in the Middle East. It was first launched in Nigeria in 2001, where it is number one operator.

CEO Sam Darwish told Bloomberg: “Proceeds will be used to build within our current markets, and move into new markets. We have high growth markets that require new sites.” Read this inspiring profile by in Brazil Journal by Geraldo Samor of how Darwish created and grew the company.

Investment continues to pour into telecoms infrastructure in Africa, after decades in which the sector has been giving outsize returns to long-term investors both private equity and through listed markets. Data centres and subsea cables are also attracting huge flows of investment.

The listing was initially planned for 2018 with a planned valuation of $10bn, but was delayed after Nigeria’s 2019 election. Helios Towers and Eaton Towers, other Africa-focused telecom infrastructure groups, also delayed their listings although Helios Towers went ahead and raised $364m with a London IPO in 2019 (see our story).
IHS preferred New York to London as telecom infrastructure companies have achieved higher valuations.

Last week’s NYSE listing was mooted in a press release in August 2020 and reported here, but it was delayed because of volatile markets due to the pandemic.

Joint lead book-running managers were Goldman Sachs, Citigroup Global Markets and JP Morgan Securities. The underwriters had an option to buy up to another 3.375m shares at the IPO price.

Operating results

Revenue for the year to December 2020 was $1.4bn, up 14% on $1.2bn in 2019. Losses fell to $323m for the year, down from $423m in 2019. In the results for the half year to June 2021, IHS reported revenue up 15% to $764m, adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of $490m and profit of $77m (up from loss of $353m a year earlier).

In January 2021 IHS announced purchases of towers in Brazil and Colombia and in April in Rwanda. This follows 2 acquisitions in February 2020 in Brazil and Kuwait.

The analysis on highlights that 97% of revenues over three years to 2020 came from three mobile network operator (MNO) companies, including 55% from MTN Nigeria and another 10% from Airtel Nigeria, making Nigeria the key source of earnings.

MTN restructuring

The offering of shares included 4.5m shares sold by existing shareholders, including South Africa’s MTN, which before the offering owned 29% of the company and valued its stake at R30bn ($2bn) at the end of June. Other major shareholders are Goldman Sachs and French listed long-term private equity investor Wendel Group, which had a 21.3% stake before the offer.

The IHS Towers listing gave giant telco MTN , headquartered in South Africa, a chance to unwind some of its former 29% stake in the company. This is part of a global drive to sell off some assets and reduce debt. The company has done several top listings on African exchanges, including the current blockbuster IPO of MTN Uganda on the Uganda Securities Exchange (see our report). It has also listed local subsidiaries in Nigeria, Rwanda and Ghana.


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