LONDON & KUWAIT CITY - IHS Holding Limited (NYSE: IHS), known as IHS Towers, has entered into a definitive agreement to divest its 70% share in IHS Kuwait Limited, including around 1,675 owned sites and approximately 700 managed sites, to Zain Group, a prominent telecommunications operator in the Middle East and Africa. The transaction, valued at $230 million, is pending customary closing conditions, including regulatory approvals, and is anticipated to finalize in the first half of 2025.
This strategic move is part of IHS Towers' broader initiative to enhance shareholder value and strengthen its balance sheet. The sale price reflects an enterprise value multiple of 14.2x based on the estimated Adjusted EBITDA after leases for IHS Kuwait, notably higher than the company's current EV/EBITDA ratio of 7.15x. According to InvestingPro analysis, the company appears undervalued based on its Fair Value metrics, with additional insights available in the comprehensive Pro Research Report, one of 1,400+ detailed company analyses available to subscribers.
Sam Darwish, Chairman & CEO of IHS Towers, remarked on the agreement, stating that it aligns with the company's goal to drive shareholder value and improve financial leverage. The transaction with Zain, Kuwait's largest mobile network operator, not only underscores the value within IHS Towers' portfolio but also supports the company's efforts to reduce net leverage.
IHS Towers, one of the world's largest independent owners and operators of shared communications infrastructure by tower count, focuses on emerging markets and maintains over 40,000 towers across ten markets. Zain Group serves 47.2 million active customers and operates in eight countries, providing mobile voice and data services, along with digital and ICT solutions through ZainTECH and international telecommunications wholesale via Zain Omantel International (ZOI).
The press release includes forward-looking statements under U.S. securities laws, cautioning that actual future results and performance may differ materially from current expectations. While the company reported losses in the last twelve months, InvestingPro analysts project a return to profitability this year, with several additional positive indicators available to subscribers. These statements are based on IHS Towers' beliefs about future events and are subject to risks, uncertainties, and assumptions.
The information in this article is based on a press release statement.
In other recent news, IHS Holding has reported a strong Q3 2024 performance, demonstrating resilience in the face of foreign exchange challenges. The company announced a 49% increase in organic revenue, offset by a 10% decline in consolidated revenue due to the significant devaluation of the Nigerian Naira. The adjusted EBITDA rose by 3% to $246 million, with a margin of 58.5%.
IHS Holding also renewed tower contracts with MTN Nigeria, contributing to a rise in contracted revenues to $12.3 billion and extending the average tenant term to 8.1 years. In a strategic move to enhance shareholder value, the company revised its capital expenditure (CapEx) guidance downward and is reviewing asset sales.
TD Cowen has increased the price target for IHS Holding to $15, maintaining a Buy rating. The decision follows IHS Holding's third-quarter results for 2024, which surpassed expectations. The firm's decision also takes into account the company's revised capex guidance for the year.
Despite foreign exchange challenges affecting performance in Brazil, Zambia, Côte d’Ivoire, and Cameroon, IHS Holding managed to grow Nigeria's segment revenue by approximately 87% organically. The company also aims to meet or exceed its 2024 revenue, adjusted EBITDA, and ALFCF guidance, projecting increased ALFCF in 2025 due to EBITDA growth and lower withholding tax in Nigeria.
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