Actis to acquire towerco from South Africa's Telkom in $355m deal
TLDR
- Telkom, South Africa's third-largest mobile network operator, agrees to sell tower and mast assets to TowerBidco for $356 million.
- Sale aligns with Telkom's strategy to divest non-core assets and focus on enhancing core operations, boosting value.
- Proceeds from the sale will primarily be used to reduce Telkom's debt and strengthen balance sheet for increased free cash flow.
Telkom, South Africa's third-largest mobile network operator by subscriber base, has agreed to sell its tower and mast assets housed under its subsidiary Swiftnet for ~$356 million to TowerBidco, a newly formed entity owned by Royal Bafokeng Holdings and Actis LLP infrastructure fund.
Telkom stated in a shareholder notice that this divestment is in line with its strategy to offload non-core assets, allowing it to focus on enhancing the value of its core operations. The proceeds from the sale will primarily be used to reduce Telkom's debt, thus fortifying its balance sheet and facilitating the generation of free cash flow. Swiftnet currently operates over 4,000 towers across South Africa.
In November, Telkom unveiled its shift towards a more infrastructure-focused business model. This model involves directing capital toward the development and upkeep of infrastructure assets such as fiber networks, data centers, satellite systems, and marine cables.
Key Takeaways
The telecommunications infrastructure sector is experiencing a surge in mergers and acquisitions, reflecting heightened activity and interest from investment firms. Simultaneously, mobile operators are divesting assets, presenting lucrative opportunities for investment firms eager to capitalize on this trend. Actis, boasting a portfolio spanning investments across 17 countries, has emerged as a key player in financing infrastructure projects throughout Africa. Notable ventures include the Accra Mall, Ikeja City Mall, Rack Centre, and the Azura Energy Project. This deal positions Actis to tap into a rapidly expanding sector buoyed by robust secular trends. The increasing demand for tower densification, fueled by rising internet penetration and the transition from 3G and 4G to 5G networks, underscores the sector's growth potential. Actis' involvement underscores its commitment to investing in infrastructure projects poised for substantial growth and impact across the African continent.
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