Africa’s largest cell-tower firms target listings
IHS Towers, Helios Towers Africa and Eaton Towers plan share sales in either London or New York, with one secondary listing in Johannesburg
Three of Africa’s largest telecommunication tower companies plan to pursue share sales in either London or New York early in 2018, taking advantage of high industry valuations to fund expansion, according to people familiar with the matter.
Closely held IHS Towers, targeting an enterprise value of $10bn, planned to list in New York, said the people, who asked not to be identified as the information was not public.
Helios Towers Africa was looking at a valuation of at least $2bn, while Eaton Towers was aiming for about $2bn, the people said. Both would list in London, while Eaton was also considering a secondary listing in Johannesburg, they said.
Tower operator shares are near record highs globally, with many making acquisitions as phone companies offload infrastructure. Shares in Spain’s Cellnex Telecom have gained 52% so far in 2017 and American Tower is up 39%
Africa’s phone mast industry is booming as the increasing use of wireless devices leads to a leapfrogging of traditional land-line connections. Mobile subscriptions in sub-Saharan Africa are set to surge 41% to 990-million in five years, according to Ericsson.
Tower operators, which also sell power to remote sites in Africa, are looking to build new masts and buy existing ones from carriers such as MTN Group and Vodacom Group.
The planned stock sales are being timed to line up with robust interest among investors for the stable returns and growth offered by tower companies, which host equipment for carriers on their masts.
Tower operator shares are near record highs globally, with many making acquisitions as phone companies offload infrastructure. Shares in Spain’s Cellnex Telecom have gained 52% so far in 2017 and American Tower is up 39%.
"There is strong demand for tower company assets and similarly investor appetite for emerging market telecom businesses," said Laura Graves, MD for Africa at TowerXchange, a networking and advisory group for the towers industry. She said she expected IHS Towers, Helios and Eaton to each list about half of their share capital to bring in new investors.
The African tower companies had each appointed banks and advisers and were meeting potential investors to test interest, said the sources. IHS has hired Goldman Sachs, Citigroup and Morgan Stanley; Helios Towers is working with Standard Bank, Bank of America Merrill Lynch and Credit Suisse; and Eaton Towers is working with JPMorgan Chase and UBS.
Representatives for IHS Towers, Helios and Eaton declined to comment. Credit Suisse, UBS, Bank of America Merrill Lynch and Standard Bank also declined to comment, while the rest of the banks did not respond to requests for comment.
Helios Towers said in September that it was exploring strategic options, including a potential listing on the London Stock Exchange, though it said no final decision had been made.