Helios Towers (HTWS.L), mcap=£1130m

HTWS.L pitch:
– Cell tower company that has derated from 11x EBITDA to 6.5x EBITDA despite EBITDA increasing by 50% over the last 2 years.
– Trades materially below peers and industry transactions.
– A standard ‘good’ towerco opportunity, just in geography that many won’t give the time of day today.
– Operates entirely in Africa and the Middle East.
– Has roughly 15k sites with an average tenancy ratio of 1.7x.
– Active acquirer of MNOs portfolios with plentiful growth opportunities – 70% of towers across Africa are still carrier-owned.
– Highly attractive tower lease-up economics with 19% ROIC for 2 tenants and increasing to 32% ROIC with 3 tenants.

HTWS.L valuation:
– At 6.5x fwd EBITDA trades materially beloow larger and mre leveraged peer $AMT (21x) and industry transactions (21x-24x).
– High-teens IRRs even with no rerating.

Exp. gain: multibagger relative to peer/transaction levels.

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