African towers business raises $2.6bn

French investment firm Wendel has committed a further $304m to IHS and will manage a new co-investment vehicle.

IHS Holding (IHS), the pan-African telecom towers business, has raised $2.6 billion in new finance – $2.0 billion in the form of equity and a loan facility of $600 million.

French investment firm Wendel, the company’s principal shareholder, has invested an additional $304 million, taking its total investment into the firm to $779 million.

The investment will be made in two tranches, with the first one a $195 million tranche that will complete by the end of this year at a 25 percent premium to the previous capital increase in April 2014. The subsequent tranche is planned for the middle of next year.

Furthermore, Wendel has brought together four US and European family investors – including FFP and Sofina – to form a co-investment vehicle that will invest an additional $181 million into IHS. Wendel will manage the vehicle and exercise its voting rights.

Following the capital raisings, Wendel will hold approximately 26 percent of the share capital directly and will represent, together with its co-investors, 36 percent of the voting rights.

In August this year, IHS acquired 2,136 towers from United Arab Emirates-based telecoms firm Etisalat and then agreed, the following month, to acquire 9,151 towers in Nigeria from South African telecoms firm MTN.

Following these transactions, IHS will hold and manage more than 20,000 towers in five African countries: Nigeria, Cameroon, Cote d’Ivoire, Zambia and Rwanda. It has reached the 20,000 towers landmark four years ahead of its target.

Frederic Lemoine, chairman of the executive board at Wendel, said in a statement that the $475 million invested by the firm in IHS between March 2013 and April this year has so far increased in value by 47 percent.

“Our additional $304 million investment underscores the confidence we have in the management team, which is skilled in handling ambitious operational challenges in complex environments,” he said.