Helios Towers acquires Omantel’s passive tower for $575 million

Helios Towers plc and Oman Telecommunications Company (Omantel) signed an agreement for Helios Towers to acquire Omantel’s passive tower infrastructure portfolio of 2,890 sites, for a cash consideration of $575 million.

This represents an enterprise value of $615 million including the Group’s estimate of transactions costs and capitalised ground leases of $40 million.

Through the Transaction, Helios Towers will establish its presence in the Middle-East region, becoming a leading independent tower infrastructure provider in Oman with 2,890 sites.

These assets are expected to deliver revenues of $59 million and adjusted EBITDA of $40 million in the first full year of operations with further growth anticipated through colocation lease-up and 300 build-to-suit (BTS) sites committed over the next seven years, for which $35 million growth capex is expected to be invested1.

It is anticipated that the Transaction will close by the end of 2021, subject to approval by Helios Towers’ shareholders and customary completion conditions including approval from the Telecoms Regulatory Authority of Oman. Helios Towers has received irrevocable undertakings to vote in favour of the acquisition at a General Meeting from certain shareholders representing over 50% of issued share capital at the time of announcement.

Commenting on the Transaction, Kash Pandya, Chief Executive Officer of Helios Towers said: “We are delighted to announce the creation of our long-term partnership with Omantel through this transaction. We look forward to supporting Omantel’s growth, and that of the wider Omani mobile market, through our delivery of customer service excellence and world-class infrastructure solutions and services.

We view Oman as a very attractive and supportive market for foreign investments, with strong growth and exciting future prospects. We will be further investing capital in Oman as we add to the tower count through greenfield BTS site development and colocations, enhance the current tower portfolio and develop a talented local Omani team.

Through the acquisition, which establishes us as a leading tower operator in Oman, we expect to achieve our Group target of 12,000+ towers well ahead of plan, while also strengthening our business through further hard-currency revenues and diversification into one of the fastest growing markets in the Middle-East.

We look forward to working with Omantel and the other MNOs over the coming years to further develop next generation mobile infrastructure solutions and services in Oman.”

Talal Said Al Mamari, Chief Executive Officer of Omantel added: “The sale of our passive tower infrastructure is in line with our strategy to develop world class asset light, strategic and advanced communications networks in Oman and to generate the greatest value and efficiency for the benefit of our shareholders, customers and partners.

This strategic partnership invites Foreign Direct Investment (FDI) in Oman, supporting Oman as a leading FDI destination in the GCC, while creating jobs and opportunities in the country. This move also allows the monetization of our towers at attractive valuation levels, de-lever our balance sheet and will accelerate network development in next generation advanced technologies while enabling management to focus on innovation and product development while outsourcing non-core infrastructure management to a world-class infrastructure management firm – Helios Towers.

We are excited to enter into this transaction and long-term strategic partnership with Helios Towers who have impressed us with their high level of expertise, interest and partnership credentials.”

The Transaction is strongly aligned to Helios Towers’ new market and strategic growth criteria. It is expected to be immediately accretive to earnings, and together with the previously announced acquisitions, is expected to increase the Group’s geographic presence to 11 markets and strengthen Group adjusted EBITDA in hard-currency to 73%. The Transaction is also expected to enable the Group to achieve its five year vision for sites and geographies well ahead of the 2025 target.

Upon closing, Helios Towers and Omantel will enter into a long-term service contract for an initial period of 15 years.

Similar to Helios Towers’ other markets, Oman represents a compelling market for telecoms with its combination of a growing and urbanised population. It is forecast 3,000 new points of service will be required over the next six years, driven by the incumbent operators Omantel and Ooredoo and also new entrant, Vodafone partner Oman Future Telecommunications, who received their license in January 2021. In addition to these strong growth dynamics, the market benefits from a hard-currency dollar-pegged environment. CT Bureau