February 6, 2019—Several telecom infrastructure companies operating in Africa have hired financial advisers as owners look towards further consolidation by raising money for mergers and acquisitions (M&A).
Industry watcher, TMT Finance (telecom, media and technology), expects 2019 to be a record year for investment and M&A deals, ‘particularly by telecom infrastructure providers looking to make public flotations to tap into public investment fund appetite and fuel further growth plans’.
Total transactions could reach $10 billion. According to TMT, on the list are leading regional African digital and mobile telecom infrastructure operators Liquid Telecom, IHS Towers, Eaton Towers and Helios Towers Africa, all of which have been hiring investment banks to arrange for initial public offerings (IPOs) and are expected to float or consolidate their sector in the next 12 months. This comes after an extended period of relative inactivity following major telecom network providers shedding the costs and responsibility of maintaining base stations by out-sourcing or outright sales.
For instance, in 2015, India’s Bharti Airtel sold just over 8000 towers in Africa for nearly $2 billion, but MTN Group had begun a similar process five years earlier across its operations on the continent. In some cases the South African-based telecom went into joint venture deals to reduce overheads.
Towards the end of March, the annual TMT Finance Africa talks are to take place in Cape Town against a backdrop of increasing deal flow across the region and appetite from global industry and investors.
National operators including Towerco of Madagascar and Wananchi of Kenya have also recently hired investment banks for sales, while large regional subsea cable business such as Seacom of South Africa and MainOne of Nigeria are also thought to be weighing up sale and investment options.