Independent telecommunications infrastructure house IHS Holding Limited (IHS Towers) (NYSE: HIS) has signed agreements to acquire 5,709 telecommunication towers in South Africa from Mobile Telephone Networks Proprietary Limited (MTN).

The transaction caters a cash and debt consideration of ZAR6.4 billion (US$410 million), and excludes IFRS 16 lease liabilities estimated to be ZAR4.6 billion.

Under the deal, IHS Towers will also provide Power-as-a-Service (PaaS) to MTN at approximately 12,800 sites across South Africa (including the acquired 5,709 sites).

The acquired assets as well as the provisions of PaaS across MTN’s portfolio are expected to deliver Revenue and Adjusted EBITDA of approximately US$220 million and $80 million, respectively, in the first full year of operations (based on a current exchange rate).

“Further growth is expected through a multi-year commitment for a portion of MTN’s new towers,” HIS Towers said in a statement.

IHS Towers will own 70% of the South African Towers business with the remaining 30% owned by a B-BBEE consortium.

The company said that it is in advanced discussions with a consortium of B-BBEE investors, “which will be completed in due course”.

Nigerian-American telecom tycoon Sam Darwish, IHS Towers Chairman and CEO, said: “I am exceptionally proud to announce IHS’ creation of the largest independent tower operator in South Africa, which represents the start of a new chapter in South Africa’s telecommunications infrastructure sector.

“The country has a growing population of almost 60 million people and we are committed to utilizing our operational expertise to invest in the towers acquired and provide cutting edge power services where necessary.”

IHS Towers has now more than 36,000 towers across its nine markets, including Brazil, Cameroon, Colombia, Côte d’Ivoire, Kuwait, Nigeria, Peru, Rwanda, Zambia, and of course, South Africa.

The business reported its quarterly financial results on November 16, its first since the NYSE $378 million IPO on October 14.

The company delivered a revenue increase of 8.7% (or 11.8% organically) to $401 million, an Adjusted EBITDA of $220 million, and an Adjusted EBITDA margin of 54.9%.

During the third quarter of 2021, capital expenditure was $81.6 million compared to $61.0 million for the third quarter of 2020.

The increase was primarily driven by the Nigeria segment – an increase in augmentation capital expenditure of $17.1 million, and an increase in capital expenditure for new sites of $18.0 million, partially offset by a decrease in maintenance capital expenditure of $8.1 million, and a decrease in other capital expenditure of $8.5 million, year-on-year for the three month period ended September 30, 2021.

The group ended the third quarter of 2021 with $2,523 million of total debt and $501 million of cash and cash equivalents.