Art of Tea - Tea of the Month

Actis buys into South African internet connectivity

Stakes in an internet service provider and a fibre connection business have been bought by the investor,…

Stakes in an internet service provider and a fibre connection business have been bought by the investor, which is taking a greater interest in digital infrastructure.

Actis, the London-headquartered investment firm, has acquired a controlling stake in South African fibre connection business Octotel and a non-controlling interest in internet service provider RSAWEB, subject to regulatory approval.

The Octotel deal values that business at ZAR 2.3 billion (USD 140 million).

Both stakes were purchased through Actis’ Neoma Africa Fund from South African newspaper publishing company Caxton & CTP Publishers and Printers and private equity investor Pembani Remgro Infrastructure Fund. Caxton bought into RSAWEB in 2013 and Octotel in 2016, while Pembani’s stake in the internet service provider was purchased in 2017, and in the fibre company in 2016.

Actis was formed in 2004, as a spin off from CDC Group, the United Kingdom’s development finance institution. It focuses on investments in emerging markets, primarily in Africa, Latin America and Asia. CDC Group is an investor in Pembani.

Octotel provides connectivity to more than 175,000 sites, including both commercial and private properties. Company founders Rob Gilmour and Mark Slingsby will both retain stakes in the company. Meanwhile, RSAWEB was founded in 2001 and is headquartered in Cape Town.

It is Actis’ first investment in the fibre sector, having previously taken stakes in data centre operations, through its establishment, earlier this year, for a USD 250 million Africa data centre platform, through which it has already invested in an operation in Lagos, Nigeria.

In a statement, Johannesburg-based Actis partner David Cooke, said: “The investment opportunity is driven by the demand for reliable, high quality, high speed digital access in the home. We see first-hand the impact that affordable connectivity has in communities in South Africa for work, entertainment and education.”

South African law firm Fluxmans Attorneys advised on the deal, while financial advice came from Rand Merchant Bank.

Actis last year took control of two funds previously managed by collapsed investor Abraaj, one of which focuses on investments in Sub-Saharan Africa. Through that investment, Actis gained control of Ghana’s GHL Bank, selling its majority stake to First National Bank Ghana in May this year.

In July CDC announced a partnership with Finland’s DFI Finnfund and French bank Société Générale, to back African small and medium-sized enterprises, and supply chains, the same month that it committed an additional USD 75 million to African trade, through Absa. That was soon after it invested in a Ghanaian medical supply company.

(0 votes) 0/5
Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp
Share on email