Helios Towers has signed agreements with Airtel Africa to acquire its passive infrastructure operating companies in Madagascar and Malawi, and enter an exclusive Memorandum of Understanding for the potential acquisition of the passive infrastructure assets in Chad and Gabon, subject to regulatory approval.
There are two separate agreements to acquire Airtel's passive infrastructure companies in Madagascar and Malawi for a total expected consideration of USD 108 million. These acquisitions are both anticipated to close in or around Q4 2021, subject to separate customary closing conditions, including required regulatory approvals.
In each of Chad and Gabon, the group has entered exclusive MoU arrangements and, subject to obtaining a passive infrastructure licence in each jurisdiction, is expected to complete the acquisition of Airtel Africa's passive infrastructure assets in or around Q1 2022.
The assets are expected to generate aggregated annualised revenues of USD 89 million and adjusted EBITDA of USD 27 million in the first full year of ownership, with further growth anticipated through 315 committed build to suits (BTS) and colocation lease-up.
The transaction represents 2,227 existing sites in Madagascar, Malawi, Chad and Gabon. Upon and subject to completion, Helios Towers will become the largest independent telecommunications infrastructure company in each of Malawi, Chad and Gabon, with a strong market share in Madagascar. It should increase Helios Towers' geographic presence to ten markets, fulfilling its 2025 vision to expand operational presence to at least eight markets.
The total consideration for the acquisition of the passive infrastructure companies in Madagascar and Malawi is expected to be USD 108 million, which represents an enterprise value of USD 124 million including estimated transaction costs and capitalised ground leases for the group. They should generate revenues of USD 38 million and adjusted EBITDA of USD 13 million in the first full year of ownership. In addition, Helios Towers has received a BTS commitment from Airtel Africa representing 195 more sites over three years, for which another USD 11 million of deferred consideration and USD 24 million growth capex are expected.
In the year to 31 March 2020, the passive infrastructure companies being bought in Madagascar and Malawi generated net profit before tax of USD 3 million with a reported gross asset value of USD 94 million. The group's Malawian operating company is expected to obtain a 20 percent local Malawian shareholding, which will be maintained during the term of Helios Towers' operating licence in Malawi. This will be effected at closing. The Group expects to disclose consideration details for Chad and Gabon upon signing the acquisition agreements in each market.
