Telecoms ecosystem projects to see $10b in IPO, M&E

MTN expects 20% in 2018 earnings

Telecoms ecosystem in Nigeria, and other sub-Saharan Africa, have been projected to see over $10 billion deals in 2019, as investors’ appetite and valuation grows.

According to TMT Finance, Africa Telecom, Media and Technology (TMT) infrastructure, Initial Public Offering (IPO), Mergers and Acquisitions (M&A) fundraising in Africa are expected to continue growing due to increasing dealflow across the region and appetite from global industry and investors.

The $1 billion sale of South African datacentre firm, Teraco Data Environments to U.S. private equity firm, Berkshire Partners, last week was reported to be valued at 22 times its 2018 EBITDA of $40-$45million. This reflected outstanding growth expectations comparable with European and U.S. datacentre businesses.

The sale of the Permira-owned datacentre also attracted interest from global industry players, Equinix, and Digital Realty, in a highly competitive sale and market.The reports added that 2019 will be a record year for investment, M&A deals in TMT infrastructure in Africa, with many large deals planned, particularly by telecom infrastructure providers looking to make public flotations to tap into public investment fund appetite and fuel further growth plans.

These deals are expected to come from leading regional African digital and mobile telecom infrastructure operators including Liquid Telecom, IHS Towers, Eaton Towers and Helios Towers Africa, all of which have been hiring investment banks to arrange for IPOs and are expected to float or consolidate their sector in the next 12 months.

National operators including Towerco of Madagascar, and Wananchi of Kenya, have also recently hired investment banks for sales, while large regional subsea cable business such as Seacom of South Africa, and MainOne of Nigeria, are also thought to be weighing up sale and investment options.

Meanwhile, leaders from the largest African telecom, media and technology companies, investment banks and investors are meeting to assess the latest investment opportunities at the yearly TMT Finance Africa in Cape Town 2019 conference on March 28.

Over 60 key speakers have been scheduled for the event, which features senior executives from Vodacom, MTN, Helios Towers Africa, CSquared, Dark Fibre Africa, Seacom, Angola Cables, Standard Bank, IFC World Bank, DLA Piper, Rand Merchant Bank, WIOCC, Paix Data Centres, BCX, European Investment Bank, Investec Asset Management, GreenWish Partners, Convergence Partners and others.

Meanwhile, South Africa’s telecoms firm MTN said on Monday it expected to see a 20 percent improvement in earnings per share last year compared with 2017.

Headline earnings per share is a key profit measure in South Africa that strips out one-off items. Africa’s biggest mobile phone operator reported headline earnings per share of 182 cents and attributable earnings per share of 246 cents for the prior financial year. Following the announcement, MTN shares recovered some earlier losses to stand at 87.60 rand per share, down 0.57 per cent.