Helios Towers £288m Initial Public Offering, UK

15 October 2019

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STJ Advisors is pleased to report that Helios Towers has successfully completed its IPO against a background of elevated market volatility and extremely challenging market conditions, particularly in emerging markets. The IPO experienced a positive aftermarket, with the share price trading up 5.7% on the first day.

The Helios Towers’ offering is the only London and the only emerging market IPO (apart from Addiko Bank, also STJ-advised) to price post-summer, with several recent IPOs pulled, restructured or trading badly both in developed and emerging markets.

After a previous unsuccessful attempt to list on the London Stock Exchange in March 2018, STJ was appointed as independent advisor to Helios Towers and its shareholders(1). Our advice included a number of key process areas to ensure the success of the Helios Towers’ IPO.

With input from STJ’s Strategic Research Advisory team, a refined positioning of Helios Towers’ attractive investment case was undertaken to enhance “the Reason to Buy” the company in its specific Emerging and Frontier African market context, and elevating the quality as well as the growth dynamics:

  • The Company presentation materials were supplemented with specific illustration to support these dynamics and to highlight the attractiveness of the entry point for new shareholders. This included their ability to continue to pursue M&A-led growth with clear IRR targets and cash value creation as well as protection against FX, inflation and energy price fluctuations, addressing many of investors’ key questions.
  • STJ was at the CEO / CFOs right hand at every step, to optimise effective and efficient communication with a range of audiences.
  • Comprehensive briefings were held with syndicate analysts to ensure a consistency of valuation approach and messaging.
  • Specific country Macro research on DRC and Tanzania was produced and marketed by 3 syndicate banks to help address the default macro concerns of the previous process.
  • For the first time, unconnected research was used for a UK IPO within equivalent syndicate research guidelines. This research independently highlighted the intrinsic value of Helios Towers superior return metrics against a global universe of over 14,000 companies, including global sector comparable companies. This approach was welcomed by investors.

STJ’s work also addressed the need to establish and incentivise an incremental combination of syndicate banks where each bank adds unique value to achieve the desired objectives:

  • STJs comprehensive independent syndicate analysis, following a revised selection process, led to the appointment of a different bank syndicate, and two additional JBRs were appointed to specifically address the core emerging and frontier market investor base
  • All banks were co-ordinated by STJ and empowered and incentivised to perform with precise agreed investor targets which STJ tracked from Early look marketing, through Pre-deal investor education, and most importantly into a detailed investor traffic light with accountability to ensure investor conversion into orders 

A de-risking of the IPO process was obtained through the establishment of a core anchor investor group and the supporting education of the broadest and deepest base of Global accounts and Specialist Emerging and Frontier investors:

  • Management met 86 investors (many several times) prior to launch, in a series of comprehensive roadshows in major markets such as the UK and the US but also including other markets that proved important including Scandinavia and the Middle East
  • An anchor group of over 20 investors was converted with clear commitment prior to launch
  • STJ ensured that book building was well coordinated to support the investment rationale and address investor concerns

Finally, STJ provided transparency of process and clarity of outcome, to a very diverse group of Helios Towers’ shareholders (significantly enhanced compared to the previous IPO attempt) enabling a successful outcome for all shareholders. Individual and collective shareholder discussions managed by STJ enabled shareholders to agree a collective view on valuation, resolution of key offering structuring and documentation issues and the final sales amounts for all individual shareholders in the offering.

An independent advisor needs to be crucial to the creation of the success of the offering. STJ Advisors provided real quality of independent advice to Management and Shareholders to ensure this outcome.

(1) Helios Investment Partners, Millicom Holding, Quantum Strategic Partners, Albright Capital Management, RIT Capital Partners, International Finance Corporation, First Arrow Managed Fund, The Bat Hanadiv Foundation, YCP HTA and Bharti Airtel Limited.

 

 

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