IHS Towers, the largest independent cellular tower operator in Africa, is seeking a valuation of more than $ 7 billion in its initial public offering in what would be the largest U.S. listing by an African company.
The group, which operates more than 30,000 towers in five African countries as well as in other markets in South America and the Middle East, is offering 22.5 million shares at a price of $ 21 to $ 24 per share, according to an application to the U.S. Securities and Exchange Commission made on Monday. The offer will include existing shareholders selling 4.5 million shares, the company said.
South Africa’s MTN, the largest mobile phone company in Africa by subscribers, owns 29 percent of IHS. Other interests are held by Goldman Sachs and Wendel, the French private equity investor.
IHS, which is the fourth largest independent tower operator in the world, could reach a net return of $ 380 million in the middle of the offer price, according to the regulatory report.
Telecommunication groups in Europe and Africa were downloading interests in masts and other infrastructure as they break down their businesses and try to earn assets that are attractive to investors.
The IHS offering is also another stage in a boom in infrastructure investment aimed at promoting internet acceptance in African markets. In addition to the investor interest in telephone masts, data center operators and submarine cables that supply the continent, international capital has also attracted international capital in recent months, a trend that has been accelerated by the pandemic.
MTN, which valued its stake in IHS at around R30bn ($ 2bn) at the end of June, is counting on a listing of a company to accelerate billions of dollars in asset sales and is also close to selling and leasing thousands of its own cell phone towers in South Africa.
IHS reported adjusted earnings before interest, tax, depreciation and amortization of $ 490 million and a profit of $ 77 million in the six months to end-June. The group’s debt has been around twice the adjusted ebitda over the past year.
The company has also invested heavily in towers outside Africa, including closing deals in Brazil and Colombia this year, but its earnings are dominated by the main market in Nigeria, where it was founded in 2001, and is the number one operator. Nigeria is also MTN’s largest market by subscribers.
IHS indicated last year that it was investigating a U.S. listing, but faced volatile stock markets during the pandemic. Goldman, Citi and JPMorgan are joint main endorsers of the offer.