It is expected that 2019 will be a multi-billion dollar blast for the African telecom, media and technology sectors, due to the increased deal flow across the region.
By way of infrastructure mergers, acquisitions and fundraising, compounded with the appetite of the global industry and investors in the continent, growth has been projected in a way which reveals that transactions for the year will surpass USD 10 Bn, TMT Finance – an investment news provider – says.
2019 is expected to break the records for investment and M&A deals in African TMT infrastructure. As a legion of huge deals has been planned by the telecom infrastructure providers, it won’t be long now before public flotations are made to take deep dips into public investment fund, which would ultimately nitrocharge further growth plans.
According to a report, there was a USD 1 Bn sale of South Africa’s data center firm Teraco Data Environments to U.S private equity firm Berkshire Partners, just recently. The sold company was believed to be valued at 22 times its 2018 EBITDA of USD 40-45 Mn. This is a glaring reflection of the remarkable growth expectations, similar to that of European and American data center businesses.
According to a WeeTracker coverage which further buttresses the growth of the TMT space in Africa, Icolo.io – a firm that designs, builds and operates state of the art carrier-neutral data centers to serve a broad spectrum of clients – is building another data center in Kenya, after launching one in Mombasa. While the firm remains quiet about how much is involved in the construction, the Mombasa center is reported to have cost between KES 400 Mn and KES 1 Bn.
Meanwhile, it has been confirmed that the sale of Permira-owned Teraco as well mouse-trapped interest from global industry players, with the likes of Equinix and Digital Realty been the loudest voices in a highly competitive sale and market.
In addition, TMT Finance says that 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.
Around this time last year, Nina, Triantis, the Global Head of TMT at Standard Bank said that there is a diversity of investment and financing opportunities in Africa, “with disruption, innovation, and consolidation likely to be the major deal drivers in the sector over the year ahead (2019)”.
In what was a looking-forward speech regarding the TMT Finance Africa in Cape Town 2018 Conference, Triantis said: “Investment and M&A in TMT are still especially active in Africa, despite some various economic challenges still facing select countries. Investment in technology is driving applications and innovation across the continent and across sectors,”
“Telecom operators are consolidating and the race to provide new broadband and wireless infrastructure is intensifying, which is resulting in an increased need for capital and lively deal flow,” Triantis adds. “The debt and equity markets are both supportive for the right companies, and we expect to see several IPOs and M&A transactions in 2018”, she added.