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(Sharecast News) - Mobile communications infrastructure investor Helios Towers announced on Tuesday that it has entered into an agreement under which Rakiza Telecommunication Infrastructure, a wholly owned subsidiary of the Oman Infrastructure Fund, will purchase a 30% minority stake in a new Oman holding company.
The FTSE 250 firm said the newly-incorporated holding company would own the passive infrastructure assets of the Omantel Telecommunications Company, with Helios Towers purchasing the remaining 70%.
It said the partnership would further assist the expansion of telecommunications infrastructure across Oman, combining the operational expertise of Helios Towers with a local partner with "extensive knowledge" of the market.
The company said it expected the acquisition to close around the end of the second quarter, subject to satisfaction of outstanding closing conditions.
"We are delighted to be partnering with Rakiza, who offers Helios Towers a wealth of local knowledge as we enter the Omani market and seek to strengthen our foothold in the Middle East," said chief executive officer Tom Greenwood.
"Rakiza not only offers a highly experienced management team through its deep public and private sector expertise, but it is also closely aligned to our goal of driving sustainable value creation through infrastructure and connectivity."
On 11 May, Helios Towers and Omantel agreed for Helios Towers to acquire Omantel's passive tower infrastructure portfolio of 2,890 sites for $575m (£459.5m) in cash, representing an enterprise value of $615m, including estimated transaction costs and capitalised ground leases of $40m.
Under the new agreement, Helios Towers would now purchase a 70% interest in the newly-incorporated holding company for the assets, with Rakiza purchasing the remaining 30%.
The consideration, unchanged from the original acquisition terms, would be paid 70% by Helios Towers and 30% by Rakiza, adjusted down pro-rata by potential local third-party debt raised.
Helios Towers said it would retain operational control of the target assets, which would be consolidated in its financial statements from completion.
Through the transaction, Helios Towers said it would establish its presence in the Middle East region, becoming a "leading independent tower infrastructure provider" in Oman.
As previously disclosed, the target assets were expected to deliver revenues of $59m and adjusted EBITDA of $40m in the first full year of operation, with further growth anticipated through colocation lease-up and 300 build-to-suit sites committed over the next seven years, for which $35m in growth capital expenditure was expected to be invested.
The group said it was intending to finance the acquisition through its existing cash and available bank facilities.
At 1133 BST, shares in Helios Towers were down 2.15% at 122.7p.
Reporting by Josh White at Sharecast.com.
