Nigeria-founded IHS Towers has increased its tower asset ownership in Brazil to 7,000 with the acquisition of additional 2,115 Towers in the South American country.
The purchase price of the transaction, on a cash and debt free basis, is $315 million.
The largest African independent owners, operators, and developers of shared telecommunications infrastructure signed the agreement to acquire São Paulo Cinco Locação de Torres Ltda. (“SP5”), a Grupo Torresur (“GTS”) portfolio company. GTS is one of the top providers of telecommunications infrastructure in Brazil and SP5’s portfolio includes 2,115 telecommunication towers across Brazil.
The deal also includes a secondary fiber network covering approximately 6.4 million homes that GTS currently operates.
IHS expects the deal to deliver Revenue and Adjusted EBITDA of approximately $38 million and $36 million, respectively, in the first full year following closing (based on a current exchange rate).
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“The acquisition of GTS’ SP5 portfolio will be our fifth transaction since we entered the region two years ago and is a testament to our continued commitment to serving the connectivity demands of Latin America,” said Sam Darwish, IHS Towers Chairman and CEO. “In the SP5 portfolio there are 2,115 sites strategically located across Brazil, increasing the attractiveness of IHS’ portfolio to our customers whether in Brazil or across our Latam operations.”
According to the company, the deal is part of IHS Towers’ inorganic growth strategy in Latin America as IHS seeks to become the biggest emerging market telecommunications infrastructure provider, as SP5’s sites are located in 25 of Brazil’s 27 states.
IHS has more than 38,000 towers pro forma across its 11 markets, including Brazil, Cameroon, Colombia, Côte d’Ivoire, Egypt, Kuwait, Nigeria, Peru, Rwanda, South Africa and Zambia.
SP5 will be integrated into IHS Towers’ existing Brazilian business with no employees transferring to IHS Towers under the acquisition.
“The sale of our SP5 portfolio represents the culmination of our strategy to create an important infrastructure business focusing on historically under-served regions of Brazil,” said Jimmy Eisenstein, GTS Chairman and CEO. “Since our acquisition, our team has driven strong organic revenue growth, proving the critical role of SP5 to the market and resulting in an excellent return for our investors.”
