Why Millicom is buying a 24% stake in Helios Towers Africa

Mergers, Acquisitions and Financial Results

By owning own 24% of shares in HTA parent company on a fully diluted basis than owning shares in HTA’s tower companies in Ghana, DRC and Tanzania, Millicom positions itself as one of the biggest telcom tower owners in Africa though the stake in HTA.

HTA owns over 5000 towers under ownership and management, and a significant build pipeline and has operations in Ghana, Tanzania, the Democratic Republic of Congo and the Republic of Congo.  HTA has also acquired towers from telcos such as Airtel and then leased back to them. By buying towers held by single operators and leasing them back to the seller and multiple other operators simultaneously, HTA makes them depend on it as well as allows them to share infrastructure, reduce operational costs and concentrate on their customers and improve their efficiency as well as increase their accessibility.

In 2010, HTA acquired, through its different operating companies, a portfolio of 2,450 Millicom-owned towers in Ghana, DRC and Tanzania. At that time, Millicom retained equity stakes in the individual tower companies. These equity positions are now being exchanged for shares in HTA. By doing this Millicom is creating for a itself a stong position in the Africa telecoms market running both telcos, Internet-based platforms through it’s partnership with Rocket Internet and it now owns 24% of Africa biggest tower operator. It literally has the future of the continent’s businesses in its hands.

HTA is its best growth partner. HTA recently raised US$363 million in new equity from existing and new shareholders to fund acquisitions and new growth in existing markets. The share exchange is being undertaken at the same valuation as the funding round.
Source: Techmoran14 October 2015