A consortium, led by infrastructure-focused private equity fund manager African Infrastructure Investment Managers (AIIM), has signed an agreement to acquire fibre network operator Octotel.

The consortium, which includes infrastructure and energy impact fund STOA and Thebe Investment Corporation, is acquiring Octotel from sustainable infrastructure global investor Actis.

In addition, the consortium has acquired a minority stake in South Africa-focused Internet service provider RSAWEB.

Both transactions are subject to customary regulatory approvals and closing conditions.

AIIM, a division of Old Mutual Alternative Investments, together with STOA and Thebe expand the South African digital infrastructure sector footprint.

“We are thrilled with the acquisition of Octotel and RSAWEB and look forward to empowering their management team to continue to drive connectivity in the Western Cape and contribute to the ongoing digital transformation in South Africa,” said AIIM investment director Thor Corry, who noted that the acquisition representd a landmark transaction for the IDEAS Fund and adds to the portfolio’s complement of high-quality growth infrastructure assets.

The IDEAS Managed Fund invests in a diversified portfolio of infrastructure assets in key sectors that unlock economic growth and developmental impact, and with closed transactions since 2018 now reaching more than R15-billion, the fund is making a meaningful impact to South Africa’s economic growth, Corry adds.

“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,” comments Octotel CEO Trevor Van Zyl.

Since its inception in 2016, Octotel, a key player in the fibre-to-the-home and fibre-to-the-business markets and significantly contributing to the digital infrastructure of the Western Cape, has passed 350 000 homes with its open-access fibre network and services over 110 000 homes and businesses.

This is an increase from the 195 000 homes passed and 56 000 customers when Actis acquired the platform in 2020, with the rapid expansion and the increasing demand for high-speed Internet in South Africa reflecting the growing importance of digital connectivity for both personal and professional use.

“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,” says Actis digital infrastructure partner David Cooke, pointing out that the South African market remains of significant interest and the company expects to see considerable growth in the country’s digital infrastructure, driven by strong secular tailwinds such as rising data consumption and Internet penetration.

“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.”

STOA CEO Marie-Laure Mazaud, comments that the transaction enforces STOA’s long-term commitment to the deployment of affordable, reliable and fast connectivity in Africa, saying that the consortium shares a common goal for the development of the South African telecommunications sector.

“We are looking forward to supporting the management to take advantage of new opportunities to ensure a fruitful growth.”

“Through this transaction, we aim to play our part in expanding the high speed fibre network into greater parts of the Western Cape,” says Thebe Investment Corporation chief investment officer Rapulane Mabelane.

The acquisition of Octotel and RSAWEB was supported by Red Wind Capital, serving as the financial adviser.