Deal to sell major fibre operator in South Africa gets green light
August 14th 2024
The Competition Commission has conditionally approved a transaction that will see a major Metrofibre shareholder acquire Octotel from UK-based investment firm Actis.
Metrofibre is South Africa’s third-largest fibre network operator. Octotel is the sixth-largest.
“The Commission is of the view that the proposed transaction is unlikely to substantially lessen or prevent competition in any market,” the watchdog stated.
“To address employment concerns, the merged entity shall not retrench employees as a result of the merger, for a period of two years following the merger implementation date.”
The consortium led by African Infrastructure Investment Managers (AIIM) first announced in March that it agreed to acquire Octotel from Actis.
The consortium is also acquiring a minority stake in Internet service provider RSAWeb.
This came after Actis announced that it is acquiring Telkom’s masts and towers business, Swiftnet, for R6.75 billion. That deal has also since received Competition Commission approval.
Actis acquired a controlling stake in Octotel for R2.3 billion in 2020.
Both transactions are subject to customary regulatory approvals and closing conditions.
The consortium acquiring Octotel and the minority stake in RSAWeb also comprises STOA and Thebe Investment Corporation.
AIIM, a division of Old Mutual Alternative Investments, is the largest shareholder in Metrofibre, another major fibre network operator in South Africa.
STOA also holds a stake in Metrofibre and is a joint stock company incorporated in France.
According to the Competition Commission, the full structure of the transaction is as follows.
The primary acquiring firm is controlled by IDEAS Infrastructure II GP (Pty) Ltd (IDEAS) and STOA.
IDEAS is a domestic private infrastructure fund managed by AIIM, a private equity fund manager ultimately controlled by Old Mutual.
“Joining forces with AIIM, STOA and Thebe marks an exciting chapter for Octotel and RSAWeb,” said Octotel CEO Trevor van Zyl.
“Together, we are poised to accelerate our mission of delivering cutting-edge connectivity solutions, bolstering economic growth and fostering innovation across the region.”
AIIM investment director Thor Corry said they are thrilled with the acquisition.
“We look forward to empowering their world-class management team to continue to drive connectivity in the Western Cape and contribute to the ongoing digital transformation in South Africa,” Corry stated.
“The acquisition represents a landmark transaction for the IDEAS Fund and adds to the portfolio’s complement of high-quality growth infrastructure assets.”
STOA CEO Marie-Laure Mazaud said they are glad to be part of the journey.
“We are looking forward to supporting the management to take advantage of new opportunities to ensure a fruitful growth,” said Mazaud.
Thebe chief investment officer Rapulane Mabelane said they aim to play a part in expanding high-speed fibre networks into greater parts of the Western Cape with the transaction.
Actis partner David Cooke said Octotel proved to be an excellent investment for them.
Cooke, who heads up digital Infrastructure at Actis, said the sale adds to their strong track record in digital infrastructure.
“Together with the exceptional management team, we have been able to scale the platform and generate significant returns for our investors while driving positive social impact,” Cooke said.
“The South African market remains of significant interest and we expect to see considerable growth in South Africa’s digital infrastructure, driven by strong secular tailwinds like rising data consumption and internet penetration.”
Source: My Broadband
Back