IHS gets $7bn valuation in New York

Africa’s biggest independent operator of mobile phone towers, IHS Towers, has launched its delayed initial public offering (IPO) on the New York Stock Exchange, achieving a valuation of nearly $7bn. The offer on 4 October was for 22.5m shares at $21/share, raising $378m for existing shareholders and for growth.

It is the biggest African market capitalisation in the US, although the shares retreated on the IPO day and thereafter.

IHS operates over 30,000 towers in Nigeria, Cameroon, Côte d’Ivoire, Zambia and Rwanda, as well as in other markets in South America and the Middle East.

It was first launched in Nigeria in 2001, where it is the number one operator. Nigeria remains the key source of its earnings.

This year it has announced deals in Brazil and Colombia.

Investment continues to pour into telecoms infrastructure in Africa, after decades when the sector has been giving outsize returns to long-term investors, both private equity and through listed markets. Data centres and subsea cables are also attracting huge flows of investment.

The offering of shares includes 4.5m sold by existing shareholders, including South Africa’s MTN, which valued its stake at R30bn ($2bn) at the end of June.

Other major shareholders are Goldman Sachs and the French listed long-term private equity investor Wendel Group, which had a 21.3% stake.

The listing was first mooted in a press release in August 2020 and reported in this column, but it was delayed because of volatile markets due to the pandemic.

Joint lead book-running managers are Goldman Sachs, Citigroup Global Markets and JP Morgan Securities. The underwriters have an option to buy up to another 3.375m shares at the IPO price.

In the results for the half year to June 2021, IHS reported adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of $490m and profit of $77m.

Globally, IHS Towers is among the top four independent operators and developers of telecom towers. Companies in this business have achieved higher valuations in New York than in London.