Octotel sold, with minority stake in RSAWeb

A consortium led by African Infrastructure Investment Managers (AIIM) has agreed to acquire fibre network operator Octotel from Actis.

This comes after Actis recently announced that it is acquiring Telkom’s masts and towers business, Swiftnet, for R6.75 billion.

Actis acquired a controlling stake in Octotel for R2.3 billion in 2020.

The consortium is also acquiring a minority stake in Internet service provider RSAWeb.

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.

The companies said in a statement on Monday that Octotel’s open access network passes approximately 350,000 homes and connects over 110,000 homes and businesses.

This is up from 195,000 homes passed and 56,000 connected when Actis acquired the company in 2020.

“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.”

The acquisition of Octotel and RSAWeb was supported by Red Wind Capital serving as the financial advisor.