IHS Towers Buys Brazilian Assets from Grupo Torresur

IHS Holding Limited is expanding its footprint in Latin America with the acquisition of a significant Brazilian telecommunications infrastructure portfolio. The company has agreed to purchase São Paulo Cinco Locação de Torres Ltda. (SP5) from Grupo Torresur (GTS) for approximately $315 million on a debt and cash-free basis. This strategic move underscores the ongoing consolidation and growth within the independent tower sector in Brazil, a market that has seen substantial development over the past decade.

The acquired SP5 assets represent a key part of GTS's strategy to cultivate infrastructure businesses in previously underserved regions of Brazil. Since its inception, the SP5 portfolio has demonstrated robust organic revenue expansion, highlighting its critical role in supporting mobile network operators' expansion and densification efforts. This transaction allows GTS to realize value from this developed asset base while continuing to operate its core platform.

Following the completion of this deal, GTS will retain and manage approximately 2,800 towers across Brazil through its entity São Paulo Locação de Torres Ltda. (SPT). SPT, which was established in 2011 via sale-leaseback agreements with major operators like Vivo and Telefonica, forms the foundational GTS business. This remaining portfolio is well-positioned to benefit from Brazil's continued demand for wireless connectivity and the rollout of advanced mobile technologies.

Providence Equity Partners, the controlling shareholder of GTS, expressed pride in the management and employees' achievements since their initial investment in 2010. Michael Gray, a Managing Director at Providence Equity Partners, noted that the team has built an exceptional business with enduring value and top-tier operational performance. This divestiture marks a significant milestone in the evolution of the independent tower market in Brazil, a sector that Providence Equity Partners helped pioneer.

The Brazilian telecommunications infrastructure market is experiencing sustained growth, driven by increasing data consumption, the need for enhanced network coverage, and the ongoing deployment of 5G services. Independent tower companies play a crucial role in facilitating these developments by providing passive infrastructure that mobile network operators can lease, thereby reducing their capital expenditure and time-to-market. The sector has attracted significant private equity interest, with numerous deals reflecting the attractive long-term prospects.

Grupo Torresur, a veteran player in the Brazilian tower market, has a history of acquiring and developing substantial tower portfolios. The company, founded by industry veteran Jimmy Eisenstein and Providence Equity Partners, has previously managed over 6,000 towers, divesting more than 3,000 after establishing strong growth trajectories. This latest transaction, advised by J.P. Morgan as the exclusive financial advisor to GTS and Providence, is anticipated to conclude in the first quarter of 2022, pending regulatory approvals.