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Highlights
- African tower operator IHS Towers is planning a potential IPO after it submitted regulatory filings with the SEC recently.
- IHS Towers is seeking to have a valuation of over US$ 7 billion.
Nigeria based mobile and telecommunications infrastructure operator IHS Towers is planning an initial public offering (IPO) on the New York Stock Exchange (NYSE).
South African telecom giant MTN, which has a 29 per cent shareholding interest in IHS Towers, reported that the company had filed papers for a proposed IPO with the US’ Securities and Exchange Commission (SEC) last week. MTN’s stake in the company was last valued to be around US$ 2 billion as of 30 June 2021.
IHS Towers is one of the largest independent telecom infrastructure companies in the world, and its potential IPO is set to make it the largest US listing by an African company so far. The company had earlier also announced a possible IPO before calling it off in 2018.
IHS Towers received approval for its ticker symbol on the NYSE to be listed as IHS.
IHS Towers’ IPO highlights
The company, which was founded by Sam Darwish in 2001, is looking to have a market valuation of over US$ 7 billion for its proposed IPO.
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IHS Towers aims to raise about US$ 380 million in net proceeds if it chooses to list in the middle range of its expected IPO price band. The company’s issue price is currently estimated to be between US$ 21.00 and US$ 24.00 per share, according to its SEC form F-1 filing.
The tower operator plans to issue 22.5 million ordinary shares in its IPO, of which 18 million shares will be issued by IHS Towers and 4.5 million by certain shareholders of the company.
According to its SEC filing, the IPO’s underwriters have an option for up to 30 days to buy a further 2.7 million ordinary shares from IHS Towers and up to 675,000 ordinary shares from the certain shareholders selling their IHS Towers shares at the offering price.
Investment banks Goldman Sachs, J.P. Morgan Securities and Citigroup Global Markets are all acting as the joint lead bookrunners for the public listing.
While, global investment bank RBC Capital Markets, UK based bank Barclays and South African financial services firm Absa are acting as its joint bookrunners.
IHS Towers’ financial performance
The company’s adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) in H1 2021 stood at US$ 490 million, and its profit was at US$ 77 million.
The company has about 365 million mobile subscriber base and operates over 30,000 towers across nine countries such as Brazil, Nigeria and others. It has a presence in Africa, the Middle East, South America and other regions.
Apart from MTN, investment bank Goldman Sachs and France’s private equity firm Wendel are the other stakeholders in IHS Towers.
Bottom Line
The proposed IHS Towers IPO comes amidst a boom in Africa’s increasing focus on infrastructure-related investments to support the regions rise in digital and internet adoption.
Moreover, the global telecom market is set to reach a size of US$ 146 billion by 2025, rising by 18 per cent on a compound annual growth rate (CAGR) basis from 2018 to 2025.
The global telecom market size stood at US$ 40 billion in 2017. This growth has been driven by a rise in subscribers base which in turn has increased the demand for improved cellular network tower infrastructures.
