Helios Towers has signed an agreement with mobile operator Free Senegal to acquire its passive infrastructure assets for an upfront cash consideration of EUR 160 million. This represents an enterprise value of EUR 178 million including an estimated EUR 18 million of taxes and capitalised ground leases. A deferred consideration of EUR 40 million and growth capex of EUR 30 million are expected to be invested over the next five years in relation to 400 committed new build-to-suit sites.
Helios Towers and Free Senegal have entered into a five-year service agreement for the provision of hosting and energy services at the acquired sites and sites to be built in the future. Helios Towers will become the largest independent tower infrastructure provider in Senegal with 1,220 sites. These assets are expected initially to deliver run-rate revenues of EUR 32 million and run-rate adjusted EBITDA of EUR 16 million. The net profit before tax generated by the assets to be acquired in this transaction was EUR 11 million on 31 December 2019.
Helios Towers' intention is materially to increase the tenancy ratio of the tower portfolio over time and bring to bear the benefits of its highly effective operating processes and disciplines, all of which have been key a feature of the group's value creation strategy over the past ten years. It is anticipated that the transaction will close by Q1 2021, subject to customary completion conditions and regulatory approval.
The transaction will be fully financed by Helios Towers' existing cash and debt facilities and it is expected to be immediately accretive to earnings. Free Senegal is the second largest mobile operator in the country, backed by a consortium of investors including NJJ, the founder of the Iliad group Xavier Niel’s private holding company, Teyliom Group and Sofima.
