IHS Towers, one of the largest telecommunications infrastructure providers in Africa, Latin America and the Middle East, has signed a $315-million agreement to acquire tower assets in Brazil.
IHS Towers is a leading telecom infrastructure firm founded by U.S. telecom tycoon Sam Darwish.
The proposed acquisition, which represents the group’s fifth transaction in the region, forms a key part of IHS Towers’ inorganic growth strategy in Latin America as it seeks to become the leading emerging market telecommunications infrastructure provider on the continent.
According to the information contained in the group’s press release, the agreement signed with Grupo TorreSur (GTS), a leading telecommunications infrastructure provider in Latin America, will see it take over its subsidiary operations through Sao Paulo Cinco Locacao de Torres Ltda (SP5), which operates a total of 2,115 telecommunications towers across Brazil.
SP5 will be integrated into IHS Towers’ existing Brazilian business following the completion of the transaction, with no employees transferring to IHS Towers as a result of the acquisition.
The group will acquire a total of 2,115 towers from GTS, bringing its tower portfolio in Brazil to about 7,000 towers, in addition to the secondary fiber network that it presently operates, which covers approximately 6.4 million homes.
The acquisition is expected to generate $38 million in revenue and $36 million in adjusted EBITDA in the first year following the deal’s closing. The transaction’s purchase price is set at $315 million in cash and without debt tender.
In a statement on the transaction, Sam Darwish, chairman and CEO of IHS Towers, said: “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.”
“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 Latin operations,” he added.
Meanwhile, Jimmy Eisenstein, chairman and CEO of GTS, said the sale of its SP5 portfolio represents the culmination of the company’s strategy to build a significant infrastructure business focused on historically underserved regions in Brazil.
“Since our acquisition, our team has driven strong organic revenue growth, demonstrating SP5’s critical role in the market and resulting in an excellent return for our investors,” he said.
As of press time on Jan. 25, shares in the leading telecom infrastructure provider were trading at $11.63, 86-basis points higher than the market open this morning.
Darwish’s 2.83-percent stake is worth $107.8 million at the current market price.
