In August 2012, Helios completed an investment of $62 million in Eland Oil & Gas, acquiring a 29.36% interest in the company. In addition to the initial investment, we also secured a two-year option on an additional $16 million at the same price. Upon exercise of the option, on a fully-diluted basis, Helios would hold a 34.24% interest. The proceeds of our investment (and additional capital raised simultaneously from third parties) were used to fund the acquisition from a Shell / Total / ENI joint venture of a 45% stake in an onshore Nigerian oilfield known as OML 40, with the balance held by the Nigerian National Petroleum Company. The company was listed on AIM immediately following the closing of the deal with Helios.
In December 2010, an investor group led by Helios completed the acquisition of two-thirds equity interest in InterSwitch Limited (“InterSwitch”), the largest payment processing service provider in Nigeria. InterSwitch has been at the forefront of the development and growth of the e-payment sector and it administers "Verve"- the leading debit card scheme in the country. The firm offers integrated message broker solutions for financial transactions, e-Commerce and e-billing solutions, telecoms value-added services and payment collections solutions. By combining the investor group’s multi-country financial services experience with the management team’s foresight, innovation and strong local payments expertise, InterSwitch is well positioned to build on its longstanding position as the most experienced, innovative and reliable payments company in the region.
“In December 2009, an investor group led by Helios completed the $146.8 million acquisition of INM Outdoor (since re-named Continental Outdoor Media) from Independent News & Media PLC. With operations in South Africa and 13 additional countries in Sub-Saharan Africa (Angola, Botswana, Lesotho, Malawi, Mauritius, Madagascar, Mozambique, Namibia, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe), Continental Outdoor Media (“Continental Outdoor”) offers its customers unparalleled access to a network of over 38,000 advertising opportunities. Continental Outdoor is well known for its commitment to innovation, corporate social responsibility, and superior customer service. By combining the investor group’s financial strength and experience with the management team’s operational expertise, Continental Outdoor will build on its longstanding position as the most experienced, operationally capable and best capitalized outdoor advertising company in Africa”.
In November 2009, Helios and a group of investors including Soros Strategic Partners LP, RIT Capital Partners plc and Lord Rothschild’s family interests, Albright Capital Management LLC committed US$350m to Helios Towers Africa Limited (“HTA”). HTA, a newly formed company will build and maintain telecommunications towers and lease space on those towers to wireless telecommunications services providers across Africa. With the launch of HTA’s operations across Africa, operators will be able to outsource non-core activities and passive infrastructure, allowing them to focus capital and managerial resources on improving their core products and services. The deployment of HTA’s tower sites will increase telecommunications coverage, helping wireless operators roll out their services more economically and enabling the extension of affordable mobile services to semi-urban and rural areas. With the initial equity commitment, the financial flexibility of its shareholders, and the in-region operating experience of Helios Investment Partners, HTA anticipates establishing itself as the most experienced, operationally capable and best independent tower operator in Africa.
In December 2007 Helios completed the $178.7 million acquisition of a 24.99% interest in Equity Bank, a Nairobi Stock Exchange-listed bank. Equity Bank focuses on providing banking services to the hitherto un-banked population. The successful execution of that strategy has enabled Equity Bank to build Kenya's largest base of account holders and industry-leading growth rates and profitability. Helios is represented on the Bank's board of directors and holds the chairmanship of several board committees. The investment and strategic partnership with the bank will enable the Bank to continue its local and regional expansion, increase its lending capability and provide capital for investment in the Bank's internal operations, principally information technology systems and human resources.
In August 2007 Helios completed the $184.5 million purchase of a 22% interest in AfricaTel, a newly formed holding company aggregating all of the sub-Saharan Africa telecommunications assets of the Portugal Telecom Group (principally in Angola, Namibia, Cape Verde, Sao Tome), in a leveraged recapitalization valuing AfricaTel at $1.15 billion on a total enterprise value basis. Helios and Portugal Telecom are spearheading AfricaTel's efforts to consolidate and grow the existing businesses, while selectively evaluating opportunities to expand the company's geographic footprint within sub-Saharan Africa.
In April 2007 Helios completed a $50 million acquisition of a 16% interest in First City Monument Bank, a rapidly growing universal bank in Nigeria. The bank, which is listed on the Nigerian Stock Exchange, is capitalizing on the low penetration of banking services within the country, and strong underlying economic growth trends, to build a dominant position in retail banking, while maintaining its traditional leadership in corporate banking. Helios is actively supporting management's efforts in executing on the corporate strategy and in team building. Helios is represented on the Bank's board of directors and on its key committees.
In January 2005, the principals of Helios founded HTN to capitalize on the extremely strong growth in mobile telephony in Nigeria by deploying the successful tower leasing business model pioneered by US-based companies such as Crown Castle International and American Tower. The tower leasing business is characterized by high operating leverage, recurring revenues underpinned by long-term contracts, and high returns on invested capital. In the sub-Saharan African environment, in particular, the model exhibits the high growth characteristics of wireless communications and the defensive characteristics of a real estate business. Helios and affiliated entities have invested approximately $52.4 million and hold a majority interest in the company on a fully-diluted basis.
In August 2004, Helios took over joint management of the Modern Africa fund, a fully-invested but severely distressed Africa-focused private equity fund, in a transaction valuing the 55% interest in Afsat Communications at $2.7 million. Afsat, headquartered in Kenya, was formed to provide high-end satellite-based data network solutions for corporate and governmental organizations in east and central Africa. Helios has provided management with hands-on support for the company's expansion into the larger and more lucrative consumer market segment as well as its geographic expansion across the sub-Saharan region (including Nigeria, the region's single largest market). In June, 2007, the company reached a merger agreement with MWEB, South Africa's leading Internet service provider, valuing the Modern Africa interest at $24 million, implying a 3-year internal rate of return of approximately 115%.
The August 2004 Modern Africa transaction valued the Modern Africa fund's 8.5% interest in Flamingo Holdings at $12.3mm. Flamingo, based in Kenya, is active in the growing, processing, packaging, marketing and distribution of cut flowers and fresh vegetable. The company is the largest vertically integrated horticultural producer and exporter of flowers and vegetables from Africa to the European Union. Helios worked closely with management to maintain the company's growth and profitability in the face of significant strategic challenges, notably continued consolidation in the UK supermarket sector, the company's principal customer base, and the concurrent rapid increase in air freight costs as oil prices rose and air cargo capacity diminished. Despite these significant strategic challenges, in May, 2007, the company reached a merger agreement with Finlay's, a wholly owned subsidiary of John Swire and Sons, valuing the Modern Africa interest at $17.5 million, implying a 40% capital gain.