Wendel signs its first direct investment in Africa and selects the telecommunication infrastructure sector
Wendel and its subsidiary Oranje-Nassau Développement announce the signing of a subscription agreement with IHS Holding to acquire a significant equity stake[1] in this company.
IHS is a rapidly growing group that provides telecom tower infrastructures to the mobile network operators in Africa. Its activities consist of building, leasing and managing telecom towers on its own and third parties behalf. With more than 1,000 employees, IHS reported a turnover of $97.5 million in 2011-2012[2]. Its entrepreneurial and multicultural management team has extensive experience in the telecom industry in Africa and globally. IHS maintains long term relationships with its blue chip clients, leading mobile network operators in Africa, such as MTN Group, Etisalat and Airtel. The company has successfully accelerated its development with a 20% CAGR of its sales over the last four years.
Wendel will participate in a capital increase of IHS to support its pan-African growth strategy. IHS, which currently manages close to 4,000 sites, notably in Nigeria, recently announced the acquisition of 1,758 telecom towers in Côte d'Ivoire and in Cameroon from MTN Group, reaching around 5,700 towers under management, of which approximately 3,000 are directly owned.
Wendel will invest $125 million, alongside IHS Holding current shareholders, who are leading development financial institutions and top tier private equity firms in Africa. These investors include Emerging Capital Partners (international private equity firm focusing on Africa, with more than 50 investments since 1997), the International Finance Corporation (World Bank Group), FMO (development bank of the Netherlands) and Investec Asset Management (one of the largest investors in private and public equity in Africa). IHS Holding is an unlisted group with one of its subsidiaries, IHS Nigeria, is listed on the local stock exchange.
Following this transaction, which values the company at approximately 14x current EBITDA, Wendel would become the largest shareholder of IHS Holding with a stake of over 25%, the management holding around 10%. Given the strong growth prospects of IHS, Wendel intends to support the company's long term growth strategy through future reinvestments to secure and accelerate its development.
As the largest shareholder, Wendel will exercise a substantial influence on the governance and on the strategic decisions of IHS Holding.
Wendel is giving priority to Africa in the context of the geographical diversification of Oranje-Nassau Développement. The very fast growth of the continent, on the doorstep of Europe, provides attractive expansion prospects to a long term investor. The African telecom industry is expected to grow at around 10% annually over the coming years. This growth will be driven by an increasing mobile penetration rate (currently amongst the lowest in the world, at 62%) and new mobile data services, in the absence of widely deployed fixed-line telephony. The need for infrastructure to support this growth will contribute to the development of the tower sharing model that is being advanced by IHS.
"The investment by Wendel will allow IHS to pursue our long-term ambition of becoming the leading player in the industry in Africa and to set a clear benchmark in terms of quality of service. Having a shareholder such as Wendel, with the depth of knowledge and track record, invest in our company is a real statement of intent. They believe in us, in our vision and our growth plans and we look forward to working alongside them to ensure IHS achieves its long term business objectives" noted Issam Darwish, Founder and CEO of IHS.
"With this investment, Wendel wishes to increase its exposure to the strong growth of the African continent. We were attracted by the dynamism of the projects and the quality of the teams at IHS and we were convinced of the balanced and profitable development outlooks in many leading countries on the continent. Telecommunications will be at the heart of the ongoing expansion in Africa and the shared infrastructures' model seems value creating to us. Beyond the initial 125 million dollars, Oranje-Nassau Développement will not hesitate to increase its investments on an as-needed basis, since IHS is a great opportunity of growth and diversification", emphasized Frédéric Lemoine, Chairman of the Executive Board of Wendel.
About IHS
IHS is a leading African telecommunications infrastructure provider Founded in 2001, IHS provides services across the full tower value chain - managed services, deployment and site ownership. IHS has operations in Nigeria, Ghana, Sudan, South-Sudan and now Cameroon and Côte d'Ivoire. In the past eleven years, IHS has built over 2,800 sites and with this transaction will increase its sites under management to 5,700 of which 3,000 are owned.
For more information visit: www.ihstowers.com
About Wendel
Wendel is one of Europe's leading listed investment firms. The Group invests in France and abroad, in companies that are leaders in their businesses: Bureau Veritas, Legrand, Saint-Gobain, Materis and Stahl. Wendel plays an active role as industry shareholder in these companies. It implements long-term development strategies, which involve boosting growth and margins of companies so as to enhance their leading market positions. Through Oranje-Nassau Développement, which brings together opportunities for investment in growth, diversification and innovation, Wendel has also invested in Van Gansewinkel Groep in the Netherlands, exceet in Germany, and Mecatherm and Parcours in France.
Wendel is listed on Eurolist by Euronext Paris and is included in the Next 20 index.
Standard & Poor's rating: Long term: BB, stable outlook - Short term: B since April 11, 2012.
Wendel is the founding sponsor of the Centre Pompidou-Metz. Owing to its long-standing commitment to the arts, Wendel was awarded the title of "Grand Mécène de la Culture" ("Grand patron of the arts") on March 23, 2012.
[1]Subject to customary closing conditions and the definitive completion of the acquisition of telecom towers from MTN in Côte d'Ivoire and
Cameroon.
[2]Financial year ended April 30, 2012.
Press contacts Analyst/Investor contacts
Christine Anglade-Pirzadeh: +33 (0)1 42 85 63 24 Laurent Marie: +33 (0)1 42 85 91 31
c.angladepirzadeh@wendelgroup.com l.marie@wendelgroup.com
Christèle Lion: +33 (0)1 42 85 91 27 Olivier Allot: +33 (0)1 42 85 63 73
c.lion@wendelgroup.com o.allot@wendelgroup.com
