Three of Africa’s largest telecommunications towers companies plan to pursue share sales in either London or New York early next year, 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 US$10bn, plans to list in New York, said the people, who asked not to be identified as the information isn’t public. Helios Towers Africa is looking at a valuation of at least $2bn, while Eaton Towers is aiming for about $2bn, the people said. IHS and Helios will list in London, while Eaton is also considering a secondary listing in Johannesburg, they said.
Africa’s phone mast industry is booming as rising wireless device use leads to a leapfrogging of traditional landline connections. Mobile subscriptions in sub-Saharan Africa are set to surge 41% to 990m 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 and Vodacom.
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. Spain’s Cellnex Telecom has gained 52% this year and American Tower Corp is up 39%.
“There is strong demand for tower company assets and similarly investor appetite for emerging market telecoms businesses,” said Laura Graves, MD for Africa at TowerXchange, a networking and advisory group for the towers industry. She said she expects IHS Towers, Helios and Eaton to each list about half of their share capital to bring in new investors.
The African tower companies have each appointed banks and advisers and are meeting with potential investors to test interest, said the people. IHS has hired Goldman Sachs, Citigroup and Morgan Stanley; Helios Towers is working with Standard Bank 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 and Standard Bank declined to comment, while the rest of the banks didn’t 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 said no final decision had been made. IHS Towers told Bloomberg last year that it would look to New York and London for a possible listing. — Reported by Loni Prinsloo, with assistance from Ruth David, (c) 2017 Bloomberg LP