American Tower to buy Africa-based Eaton Towers

The deal is worth $1.85 billion.

Boston-based American Tower has acquired Eaton Towers, which owns and operates approximately 5,500 communications sites across five African markets, for $1.85 billion.

The deal could trigger more activity in the African towers market, which has long been tipped for consolidation. Towers have become tradeable assets for telecoms companies worldwide with the US, Africa and India leading the pack in splitting the masts from the operations side of the sector.

As a result of the deal, American Tower also expects to accelerate new build activity across the African region due to expanded relationships with multiple key tenants.

American Tower is an independent owner, operator and developer of multitenant communications real estate, with a portfolio of over 170, 000 communications sites.

Eaton Towers owns towers in Ghana, Uganda, Kenya, Burkina Faso and Niger, which it leases back to carriers including Orange, Tigo, Vodacom and MTN.

The company was due to list shares in London and Johannesburg last year but pulled the float. According to the Financial Times, the initial public offering was expected to flush out a bidder such as American Tower, one of the largest independent mast owners in the world.

Eaton Towers was founded by Terry Rhodes, who launched African mobile phone company Celtel and remains its chief executive, alongside former Orange chief executive Sanjiv Ahuja and Alan Harper, a Vodafone veteran who now chairs satellite company Avanti.

Jim Taiclet (pictured), chief executive of American Tower, said in a statement: “This transaction will significantly augment our existing footprint in Africa and positions ATC to take even better advantage of the growth opportunity in the region as 4G mobile data technology is deployed to serve millions of Africans over the coming years.”

The assets are expected to generate approximately $260 million in property revenue and approximately $165 million in gross margin, at current exchange rates, in their first full year in American Tower’s portfolio. The deal is expected to close by the end of 2019, subject to regulatory approvals.