Providence in $630m Africa deal

Providence Equity Partners has led a consortium investing in Helios Towers Africa, its first foray in the region.

A unit of Africa-focused Helios Investment Partners has raised $630 million from a consortium of new and existing investors led by Providence Equity Partners to fund acquisitions and organic growth, according to a statement.

The deal sees Providence makes its first foray into Africa, tapping into rising demand for infrastructure in the telecommunications sector on the continent.

100,000 Points of Service (“PoS”) are needed in Africa to satisfy demand for 2G coverage and associated capacity demand over the next five years. The PoS requirement is underpinned further by the growing demand for 3G and 4G data, which is driving the need for significant additional infrastructure capacity and in-fill across the continent.

The unit, Helios Towers Africa (HTA), will use the money to fund its acquisition of the African towers network being sold by the Indian telecom giant Bharti Airtel, according to a statement from Providence’s legal advisor, Weil, Gotshal & Manges.

Through the acquisition, Helios’ African infrastructure capacity will be increased to some 7,800 owned towers, the statement said. HTA was founded by Helios Investment Partners to operate telecom infrastructure across Africa, it added.

“As long-term investors in the global wireless industry, we are excited about the tremendous growth potential across Africa and HTA’s unique position as the leading, independent telecoms tower company on the continent,” said Dany Rammal, a managing director at Providence.

Apart from Providence, the consortium includes existing shareholders of HTA – George Soros’ Quantum Strategic Partners, Helios Investment Partners, Albright Capital Management, RIT Capital Partners and the International Finance Corporation. New investors include the IFC African, Latin American and Caribbean Fund.

HTA, founded by Helios Investment Partners, said in the statement that it also expects to complete negotiations shortly on new and extended debt facilities of over $350 million with a strong syndicate of international and local lending institutions.

“We are delighted to have received this vote of confidence in our strategy and the growth opportunity available, from both our existing investors and new supporters. The market opportunity is as compelling as ever and this new capital injection will help us to consolidate our pan-African vision and market leading position, even further,” said Chuck Green, chief executive officer of HTA.