U.S.-Nigerian telecom mogul signs $230-million deal to sell Kuwait tower business to Zain
Key Points
- IHS Holding sells 70% stake in IHS Kuwait to Zain Group for $230 million, pending regulatory approvals in H1 2025.
- The deal includes 1,675 telecom sites and 700 managed locations, valued at an enterprise multiple of 14.2x Adjusted EBITDA.
- IHS aims to strengthen its balance sheet by using proceeds to reduce debt, while Zain solidifies its dominance in Kuwait.
IHS Holding, a global telecom infrastructure leader headed by U.S.-Nigerian telecom tycoon Sam Darwish, has reached a definitive agreement to sell its 70 percent stake in IHS Kuwait Limited to Zain Group for $230 million.
The transaction, which is expected to close in the first half of 2025 pending regulatory approvals, includes 1,675 telecom sites and 700 managed locations.
Darwish, CEO of IHS Towers, finalized the agreement with senior officials from Zain Group. The deal values IHS Kuwait at an enterprise value of $230 million, reflecting a multiple of 14.2x based on the company's Adjusted EBITDA after leases.
IHS strengthens balance sheet with sale
This deal underscores the strategic value within IHS Kuwait’s portfolio and aligns with IHS Towers' ongoing efforts to optimize its assets and strengthen its balance sheet.
“The sale of our Kuwait operations to Zain marks a significant step in our portfolio optimization strategy,” Darwish stated, adding that the proceeds from the sale would primarily be used to reduce IHS’s debt load, further bolstering the company’s financial stability.
By unlocking value from its early investments in IHS Kuwait Limited, this move not only addresses liquidity challenges but also strengthens IHS Holding's overall financial position.
Meanwhile, for Zain Group, the acquisition reinforces its dominance in Kuwait, further solidifying its position as the leading mobile operator in the region.
With a customer base of 47.2 million across eight countries, including Saudi Arabia, Iraq, and Sudan, Zain continues to expand its telecommunications and data services across the Middle East and Africa.
IHS faces financial setbacks, expands operations
IHS Holding, founded in 2001 by Sam Darwish, operates over 40,000 telecom towers across Africa, making it the third-largest independent tower company globally. Recently, the company secured new contracts with MTN in Nigeria, South Africa, and Rwanda, reinforcing its leadership in African telecom infrastructure.
Despite the decision to sell its Kuwait unit, IHS remains committed to expanding its footprint and delivering key projects. This includes the ongoing expansion of its tower network and impactful social initiatives, such as the installation of solar-powered boreholes in Maiduguri, Nigeria, which provide clean water to nearly 20,000 flood victims.
However, the company has faced financial setbacks. In Q3 2024, IHS reported a 10 percent decline in revenue, largely due to the devaluation of the Nigerian naira. Looking ahead, for the year ending December 31, 2024, IHS anticipates its MENA segment will be affected by rising lease costs in Kuwait, presenting further challenges for the company.