25 March 2024 – A consortium led by African Infrastructure Investment Managers (AIIM), one of Africa’s largest infrastructure-focused private equity fund managers and a division of Old Mutual Alternative Investments, and also comprising STOA, a leading impact fund in infrastructure and energy dedicated to developing and emerging markets, and Thebe Investment Corporation, today announced that it has signed an agreement to acquire Octotel, a leading South African fibre network operator. The consortium is acquiring Octotel from Actis, a leading global investor in sustainable infrastructure. In addition, the consortium, led by AIIM, has acquired a minority stake in RSAWeb, a South African focused ISP. Both transactions are subject to customary regulatory approvals and closing conditions.
Since its inception in 2016, Octotel has emerged as a key player in the fibre-to-the-home (FTTH) and fibre-to-the-business (FTTB) markets, significantly contributing to the digital infrastructure of the Western Cape. The company’s open access fibre network passes approximately 350,000 homes and caters to over 110,000 homes and businesses, up from 195,000 and 56,000 respectively when Actis acquired the platform in 2020.
Octotel promotes positive environmental and social impact in the region with recent initiatives including the provision of free 1GB internet connections to more than 150 schools in the Western Cape, converting its fleet of vehicles to LPG hybrid vehicles to decarbonise transportation, and securing one of the first social loans in South Africa in recognition of the company’s work to promote digital inclusion.
The company’s rapid expansion and the increasing demand for high-speed internet in South Africa reflect the growing importance of digital connectivity for both personal and professional use. With a strong focus on customer service, a proven network reliability, and an experienced and dynamic management team, Octotel is well-positioned to continue its growth. With this transaction, the consortium is committing to support the network expansion of the company as well as expanding into new segments, so that Octotel can remain a key player in South Africa’s digital infrastructure development.
Trevor Van Zyl, CEO of Octotel, affirmed, “Joining forces with AIIM, STOA and Thebe marks an exciting chapter for Octotel and RSAWEB. Together, we are poised to accelerate our mission of delivering cutting-edge connectivity solutions, bolstering economic growth and fostering innovation across the region.”
Thor Corry, Investment Director at AIIM, said: “We are thrilled with the acquisition of Octotel and RSAWeb and 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. The acquisition represents a landmark transaction for the IDEAS Fund and adds to the portfolio’s complement of high-quality growth infrastructure assets.”
The IDEAS Managed Fund seeks to invest in a diversified portfolio of infrastructure assets in key sectors that unlock economic growth and developmental impact, such as, digital infrastructure. “The purpose of the IDEAS Fund is to provide a channel for substantial pools of domestic institutional capital to be invested in tangible, strategic projects in the regional economy. With closed transactions since 2018 now reaching more than ZAR 15 billion, the fund is making a meaningful impact to South Africa’s economic growth,” concluded Corry.
Commenting further, Marie-Laure Mazaud, CEO of STOA, added: “We are glad to be part of this journey alongside our partners AIIM and Thebe with whom we share a common goal for the development of the South African telecommunications sector, and we are looking forward to supporting the management to take advantage of new opportunities to ensure a fruitful growth. This transaction reinforces STOA’s long-term commitment to the deployment of affordable, reliable and fast connectivity in Africa.”
Rapulane Mabelane, Thebe’s Chief Investment Officer, stated: “The core of Thebe’s investment strategy is to Build Communities by partnering with the right teams and investing in highly successful world class businesses that are involved in sectors that drive economic growth and transformation. One of the objectives of the National Development Plan is to bridge the digital divide. Through this transaction, we aim to play our part in expanding the high speed fibre network into greater parts of the Western Cape.”
David Cooke, Partner, Digital Infrastructure at Actis, added: “Octotel has proved to be an excellent investment for Actis. 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. The sale of Octotel adds to the strong track record Actis has in digital infrastructure. Digital represents an important sector for Actis and we’ve got an exciting investment pipeline for the sector, unlocking opportunities globally with US$1.5 billion committed to the sector worldwide. 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.
About Octotel
Octotel is one of the leading fibre network operators in the Western Cape region of South Africa, recognized for its significant contribution to improving internet connectivity in the area. Established in 2016, the company has swiftly grown to establish a robust footprint in the digital infrastructure sector.
Octotel’s main service involves the provision of fibre-to-the-home (FTTH) and fibre-to-the-business (FTTB) internet connections, focusing primarily on offering high-speed, reliable internet access. Its open access fibre network is extensive, covering a large number of homes and businesses. This network allows various Internet Service Providers to utilize its infrastructure to deliver internet services to their customers, making Octotel a critical enabler in the region’s digital ecosystem.
One of Octotel’s key strengths lies in its approach to being vendor-neutral, which promotes a competitive environment for ISPs and ensures customers have a choice of providers. This strategy has been crucial in driving the affordability and quality of internet services in the Western Cape.
About AIIM
AIIM, a member of Old Mutual Alternative Investments* (OMAI), has been investing in the African infrastructure sector since 2000 with a track record extending across eight African infrastructure funds. AIIM’s team of 40+ investment professionals is based out of five locally staffed offices across the continent in Cape Town, Johannesburg, Nairobi, Lagos and Abidjan and a presence in Morocco and Egypt providing direct on-the-ground coverage of our key markets.
AIIM currently manages an aggregate AUM of USD2.7 billion in assets across the power, renewable energy, digital infrastructure, mid-stream energy and transport sectors with operations in 19 African countries. AIIM’s digital infrastructure portfolio extends across data centres, telecommunication towers and high-speed fibre businesses with 30,000+ towers and 550,000 fibre connections providing critical data connectivity to users across 6 countries in Africa.
AIIM is a licensed FSP approved by the Financial Sector Conduct Authority in South Africa.
(*) Old Mutual Alternative Investments (OMAI) is a private alternative investment manager in Africa, with over USD6.8 billion (ZAR128.3 billion) under management in infrastructure, private equity, hybrid equity and impact funds. It is a member of Old Mutual Investment Group, the investment management arm of Old Mutual.
ABOUT STOA
Launched in 2017 by Caisse des Dépôts and Agence Française de Développement, STOA is a leading impact investor in infrastructure and energy, with an objective to invest up to €1 billion in equity and quasi-equity. Our purpose: financing and supporting the development of sustainable and resilient infrastructure for future generations in Africa, Latin America and Asia.
STOA benefits from the complementary support and expertise of its two shareholders. Caisse des Dépôts is a public long-term investor serving the general interest and economic development of local areas; AFD is the French Public Development Bank which commits to financing projects in key transition sectors in developing and emerging countries. In the context of their joint strategy, these two institutions are fully committed to play a key role in the four major transitions, the energy/environmental, digital, territorial and demographic transitions.
As an emerging markets focused infrastructure investor, telecommunication is a core sector focus for STOA and South Africa is also one of STOA’s key targeted geographies.
About Thebe Investment Corporation
Informed by our heritage, inspired by our mission to build communities, and firmly rooted in our values, Thebe creates sustainable value through acquiring and growing businesses. Founded in 1992, Thebe Investment Corporation has grown to be a formidable South African black-owned and black managed investment management company with significant assets under management. Our ambition is to manage a cash generative portfolio that consistently provides our stakeholders with returns that are above the market.
Thebe is a socially embedded investment management company that uses its business success to transform lives and make a difference in communities. With a strong diversified but focused portfolio, Thebe focuses on investing and growing key sectors that drive the country’s economic growth. Our current investment portfolio includes Petro-chemicals, Power (including renewable energy) & Infrastructure, Business Services and Food & Agro processing. Among others, Thebe’s strength lies in its extensively experienced leadership team with expertise, passion and entrepreneurial flair.
About Actis
Actis is a leading global investor in sustainable infrastructure, delivering competitive returns for institutional investors and measurable positive impact for the countries, cities and communities in which it operates. Actis invests in structural themes that support long-term, equitable growth in defensive, critical infrastructure across energy transition, digitalization transition, and supply chain transformation.
The firm’s decades of global experience, operational know-how and strong culture allows it to create global sustainability leaders at scale. Since inception, Actis has raised $25 billion to invest in a better tomorrow. Actis is a signatory to the United Nations backed Principles for Responsible Investment (UNPRI), an investor initiative developed by the UNEP FI. The firm has consistently been awarded the highest rating score in the UNPRI independent assessment.
Contact
Sandrine Valadoux
Communication Officer, STOA Infra & Energy
sandrine.valadoux@stoainfraenergy.com
