TIDMHTWS
RNS Number : 1982Y
Helios Towers PLC
11 May 2021
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
Helios Towers plc
Helios Towers enters into agreement to acquire 2,890 sites from
Omantel for $575 million
Establishing the Group's presence in one of the fastest growing
markets in the Middle-East region
Build-to-suit commitment for at least 300 additional new
sites
London, 11 May 2021: Helios Towers plc ("Helios Towers", the
"Group"), the independent telecommunications infrastructure
company, and Oman Telecommunications Company ("Omantel"), the
largest mobile network operator in Oman, are pleased to announce an
agreement for Helios Towers to acquire Omantel's passive tower
infrastructure portfolio of 2,890 sites, for a cash consideration
of $575 million (the "Transaction"). This represents an enterprise
value of $615 million including the Group's estimate of
transactions costs and capitalised ground leases of $40
million.
Through the Transaction, Helios Towers will establish its
presence in the Middle-East region, becoming a leading independent
tower infrastructure provider in Oman with 2,890 sites. These
assets are expected to deliver revenues of $59 million and adjusted
EBITDA of $40 million in the first full year of operations with
further growth anticipated through colocation lease-up and 300
build-to-suit ("BTS") sites committed over the next seven years,
for which $35 million growth capex is expected to be invested 1
.
It is anticipated that the Transaction will close by the end of
2021, subject to approval by Helios Towers' shareholders and
customary completion conditions including approval from the
Telecoms Regulatory Authority of Oman. Helios Towers has received
irrevocable undertakings to vote in favour of the acquisition at a
General Meeting from certain shareholders representing over 50% of
issued share capital at the time of announcement.
1 Revenues and adjusted EBITDA are Group estimates and reflect
expected performance of the acquired assets in the first full year
of ownership. These figures should not be treated as a profit
forecast nor are they audited.
Commenting on the Transaction, Kash Pandya, Chief Executive
Officer of Helios Towers said:
"We are delighted to announce the creation of our long-term
partnership with Omantel through this transaction. We look forward
to supporting Omantel's growth, and that of the wider Omani mobile
market, through our delivery of customer service excellence and
world-class infrastructure solutions and services. We view Oman as
a very attractive and supportive market for foreign investments,
with strong growth and exciting future prospects. We will be
further investing capital in Oman as we add to the tower count
through greenfield BTS site development and colocations, enhance
the current tower portfolio and develop a talented local Omani
team.
Through the acquisition, which establishes us as a leading tower
operator in Oman, we expect to achieve our Group target of 12,000+
towers well ahead of plan, while also strengthening our business
through further hard-currency revenues and diversification into one
of the fastest growing markets in the Middle-East.
We look forward to working with Omantel and the other MNOs over
the coming years to further develop next generation mobile
infrastructure solutions and services in Oman."
Mr. Talal Said Al Mamari, Chief Executive Officer of Omantel
added:
"The sale of our passive tower infrastructure is in line with
our strategy to develop world class asset light, strategic and
advanced communications networks in Oman and to generate the
greatest value and efficiency for the benefit of our shareholders,
customers and partners. This strategic partnership invites Foreign
Direct Investment (FDI) in Oman, supporting Oman as a leading FDI
destination in the GCC, while creating jobs and opportunities in
the country. This move also allows the monetization of our towers
at attractive valuation levels, de-lever our balance sheet and will
accelerate network development in next generation advanced
technologies while enabling management to focus on innovation and
product development while outsourcing non-core infrastructure
management to a world-class infrastructure management firm - Helios
Towers. We are excited to enter into this transaction and long-term
strategic partnership with Helios Towers who have impressed us with
their high level of expertise, interest and partnership
credentials."
Further transaction highlights and details
The Transaction is strongly aligned to Helios Towers' new market
and strategic growth criteria. It is expected to be immediately
accretive to earnings, and together with the previously announced
acquisitions 2 , is expected to increase the Group's geographic
presence to 11 markets and strengthen Group adjusted EBITDA in
hard-currency to 73%. The Transaction is also expected to enable
the Group to achieve its five year vision for sites and geographies
well ahead of the 2025 target.
Upon closing, Helios Towers and Omantel will enter into a
long-term service contract for an initial period of 15 years.
Helios Towers has a track record of successful acquisitions and
its Group structure provides a strong platform for the integration
of the assets. Consistent with its other acquisitions, the Group
has prepared a 100-day integration plan in anticipation of a
successful completion.
Following successful capital raising activities in 2020 and the
$250 million convertible bond issuance in March 2021, the Group has
sufficient cash and available facilities to finance the
Transaction, in addition to funding the previously announced
acquisitions. In line with its financial strategy and medium-term
target net leverage range of 3.5 - 4.5x, Helios Towers continues to
actively review its funding options to support its organic growth
and pipeline of inorganic growth opportunities.
The Transaction consideration may be adjusted for the value of
any additional sites that are added to the transaction perimeter
before completion by Omantel (up to a maximum cap of 50 sites) or
deductions to account for any decommissioned sites or any sites
where a force majeure has occurred, and is subject to a
post-completion adjustment mechanism linked to the working capital
and levels of debt/cash at the assets on the date of
completion.
The Transaction is deemed Class 1 under the Financial Conduct
Authority's Listing Rules and, as a result, is subject to approval
by Helios Towers' shareholders. Further detail on the Transaction
and procedure for voting at a General Meeting to be convened for
Helios Towers' shareholders will be set out in a circular to be
published in due course.
2 Reflects the Free Senegal transaction announced in August 2020
and the Airtel Africa agreements across Malawi, Madagascar, Chad
and Gabon announced in March 2021, which remain subject to
completion.
Market Overview
Similar to Helios Towers' other markets, Oman represents a
compelling market for telecoms with its combination of a growing
and urbanised population. It is forecast 3,000 new points of
service will be required over the next six years, driven by the
incumbent operators Omantel and Ooredoo and also new entrant,
Vodafone partner Oman Future Telecommunications, who received their
license in January 2021. In addition to these strong growth
dynamics, the market benefits from a hard-currency dollar-pegged
environment.
Oman
--------------------------------- ------
Markets overview:
Population (m)(1) 5
(2020)
GDP CAGR(2) 3%
(2020 - 2026)
Unique subscriber penetration(3) 66%
(2020)
4G subscriber growth(3) 6%
(2020 - 2025)
Mobile network operators (#) 3
Points of Service CAGR(4) 7%
(2020 - 2026)
Transaction KPIs:
Sites 2,890
Site tenancy ratio 1.2x
Committed BTS 300
Y1 Revenues (US$m)(5) 59
Y1 Adj. EBITDA (US$m)(5) 40
1. United Nations, World Population Prospects 2019
2. Fitch Database, accessed April 2021
3. Unique mobile subscriber penetration and subscriber growth.
GSMA Intelligence Database, accessed April 2021
4. Hardiman report, March 2021
5. Revenues and adjusted EBITDA are Group estimates and reflect
expected performance of the acquired assets in the first full year
of ownership, with further growth expected through the 300
committed BTS and colocation lease-up. These figures should not be
read as a profit forecast and have not been audited
Contact
HELIOS TOWERS
Investor Relations
Chris Baker-Sams, Corporate Finance Manager
+44 (0)752 310 1475
Media Relations
Edward Bridges / Stephanie Ellis
FTI Consulting LLP
+44 (0)20 3727 1000
For the purposes of MAR, the person responsible for making this
announcement is Paul Barrett, General Counsel and Company
Secretary.
Helios Towers' management will host a conference call for
analysts and institutional investors today at 13:00 BST. For the
best user experience, please access the conference via the webcast.
You can pre-register and access the event using the link below:
Registration link - Omantel tower portfolio acquisition
If you are unable to use the webcast for the event, or if you
intend to participate in Q&A during the call, please dial in
using the details below:
Europe & International: +44 203 936 2999
South Africa (local): 087 550 8441
USA (local): +1 646 664 1960
Passcode: 563500
About Helios Towers
-- Helios Towers is a leading independent telecommunications
infrastructure company, having established one of the most
extensive tower portfolios across Africa. It builds, owns and
operates telecom passive infrastructure, providing services to
mobile network operators.
-- Helios Towers owns and operates telecommunication tower sites
in Tanzania, Democratic Republic of Congo, Congo Brazzaville, Ghana
and South Africa. Following recently announced acquisition
agreements (including the Transaction) and subject to applicable
regulatory and certain shareholder approvals, Helios Towers expects
to establish a presence in six new markets across Africa and the
Middle-East over the next 12 months. Including these acquisitions
and committed BTS, the Group's total site count is expected to
increase from over 7,300 towers currently to approaching
15,000.
-- Helios Towers pioneered the model in Africa of buying towers
that were held by single operators and providing services utilising
the tower infrastructure to the seller and other operators. This
allows wireless operators to outsource non-core tower-related
activities, enabling them to focus their capital and managerial
resources on providing higher quality services more
cost-effectively.
About Omantel
-- Omantel is the first and the leading telecommunications
operator in Oman with the most advanced mobile and converged
networks in the country, and one of the most prominent telecom
operators in the Middle East with leading technologies and
initiatives in digital transformation with consolidated group
revenues of US$6.5 billion in 2020.
-- Omantel has further established its prominence in the Middle
East in 2017 post the acquisition of a controlling stake in Zain
Group; with a presence now spanning 8 countries.
-- Omantel is listed on the Muscat Stock Exchange and majority
owned by Oman Investment Authority.
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