French group Wendel invests in African ICT towers

French investment holding group Wendel has paid $125m to acquire a 25% stake in Nigeria based telecommunication infrastructure player, IHS Holdings, in what marks the attraction of the exploding African ICT market.

The investment was described as the first direct venture by Wendel, via its subsidiary Oranje-Nassau Développement, and came with suggestions that this could be the beginning of scramble for further opportunities throughout the African continent.

IHS hit the news headlines recently when it acquired over 1700 mobile network towers from MTN in Cote d’Ivoire and Cameroon for $284m. IHS is described as a provider of managed services across the full tower value chain with operations in Ghana, Sudan, South-Sudan and now Cameroon and Cote d’Ivoire. In the past eleven years, IHS has built over 2,800 sites and has under management over 5,700 of which 3,000 are owned. The company posted $97.5m in revenue in the year ended 30 April 2012.

IHS said the investment from Wendel was part of a larger fundraising for its Pan-African growth. The equity raise was also augmented by debt raised from various international banks operating on the African continent. This investment will fund IHS’ ongoing investment programme to support further tower purchases, infrastructure improvements and the continued development of innovative technology such as solar power throughout Africa and the Middle East.

Other key shareholders in HIS include International Finance Corporation, South Africa’s Investec Asset Management, Emerging Capital Partners, Dutch Development Bank (FMO), local Nigerian banks and private investors such as Skye Bank. Management will retain 11%.

Commenting on the announcement, CEO and vice-Chairman of IHS Holdings Issam Darwish said: “The telecoms market in Africa is changing as the leading mobile network operators continue to partner with companies like IHS to monetize their non-core assets by outsourcing passive infrastructure. Wendel recognizes this market opportunity and we are delighted to be working with them as we continue to expand.”

Frédéric Lemoine, Chairman of the Executive Board of Wendel, said “With this investment, Wendel’s long-term intentions are to gain a strong foothold in the African growth story. We were attracted by the professionalism of the IHS senior management team, as well as the company’s balanced approach over the last ten years in transforming themselves into the leading telecoms provider across Africa and the Middle East, but also their long term outlook and commitment. Telecommunications will be at the heart of the African boom and if there is a requirement to invest further, we will not hesitate to do so, on a country-by-country basis. This transaction with IHS showcases a perfect operational blend of growth and diversification.”

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