Having entered the Brazilian market in 2019, the $315 million deal will see the infrastructure specialist’s Brazilian tower portfolio grow to around 7,000 towers in total
IHS Towers, one of the largest independent owners, operators, and developers of shared telecommunications infrastructure in the world by tower count, has signed an agreement to acquire São Paulo Cinco Locação de Torres Ltda. (“SP5”), a Grupo Torresur (“GTS”) portfolio company. GTS is one of the leading providers of telecommunications infrastructure in Brazil and SP5’s portfolio includes 2,115 telecommunication towers across Brazil. Proforma for closing this portfolio, IHS Towers will own approximately 7,000 towers in Brazil, in addition to the secondary fiber network covering approximately 6.4 million homes passed that it currently operates.
The acquisition is expected to deliver Revenue and Adjusted EBITDA of approximately US$38 million and US$36 million, respectively, in the first full year following closing (based on a current exchange rate). The purchase price of the transaction, on a cash and debt free basis, is US$315 million.
This transaction forms a key part of IHS Towers’ inorganic growth strategy in Latin America as IHS seeks to become the leading emerging market telecommunications infrastructure provider, as SP5’s sites are located in 25 of Brazil’s 27 states. SP5 will be integrated into IHS Towers’ existing Brazilian business with no employees transferring to IHS Towers under the acquisition.
Sam Darwish, IHS Towers Chairman and CEO, commented “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 Latam operations.”
Jimmy Eisenstein, GTS Chairman and CEO, said “The sale of our SP5 portfolio represents the culmination of our strategy to create an important infrastructure business focusing on historically under-served regions of Brazil. Since our acquisition, our team has driven strong organic revenue growth, proving the critical role of SP5 to the market and resulting in an excellent return for our investors.”
The deal is subject to regulatory approvals and is expected to close in Q1 2022.
In related news, IHS have also announced that they have struck a three-year international partnership with UNICEF, supporting the charity’s Giga Initiative, which aims to connect every school worldwide to the internet. The partnership includes a donation of $4.5 million as well as the provision of relevant tower data.
“Connecting schools to the internet can fast track young people’s access to educational resources and opportunities and help drive wider social and economic benefits for whole communities and countries,” said Thomas Davin, UNICEF Director of Innovation. “As COVID-19 continues to amplify inequalities in access to learning, we welcome IHS Towers’ generous and timely commitment to our ambitious goals.”