Community Investment Ventures Holdings (CIVH), a shareholder in Dark Fibre Africa, announced on Friday is has bought 34.9% of fibre-to-the-home pioneer Vumatel and plans to buy the remaining 65.1% soon, subject to funding and regulatory approvals.
The telecommunications investment firm has not disclosed the value of the deal. Vodacom had earlier been strongly speculated to be interested in buying a 49% stake in Vumatel.
CIVH is owned by a diverse group of investors: JSE-listed Remgro (which is the controlling shareholder with a 50.9% stake), New GX Capital Holdings, Chlanich, Community Investment Holdings and Consolidated Capital Investments.
“CIVH’s investment in Vumatel complements the group’s existing portfolio, comprising wholly-owned subsidiary Dark Fibre Africa,” it said in a statement. “DFA builds and operates over 10 000km of optic-fibre infrastructure, which is leased to its wholesale customers on an open-access basis.”
“Acquiring Vumatel will significantly strengthen CIVH’s ability to contribute to, one day, getting broadband and Internet to every suburb, home and business in South Africa,” said CIVH nonexecutive chairman Pieter Uys. “Both companies will operate as independent subsidiaries of CIVH and will continue to build open-access networks across the country.”
Vumatel’s home fibre network spans over 8 000km, which it leases to Internet services providers , which in turn sell Internet products to the consumer.
Vumatel entered the FTTH market in 2015 when it rolled out a project to provide the Johannesburg suburb of Parkhurst with high-speed Internet. The company has since expanded significantly in Gauteng, as well as in Cape Town and Durban. Vumatel recently revealed plans to begin deploying fibre broadband to townships, with a project to bring broadband internet to Alexandra, north of Johannesburg, expected to begin soon.
“Vumatel took the early lead in the fibre-to-the-home market in South Africa,” said Niel Schoeman, executive chairman of Vumatel, in the statement. “Strategically, the transaction makes sense for the parties. Telecoms requires scale and access to capital to be efficient to the broader community. South Africa still has a long way to go for all its citizens to have access to world class broadband. The addition of CIVH as a significant shareholder, will give impetus to Vumatel’s ambitious efforts in that regard.”
The acquisition will allow Vumatel and DFA to reach more customers with better products in the small and medium enterprise market, said Khudu Pitje, CEO of New GX.
Rand Merchant Bank and Morgan Stanley acted as joint transaction advisers to CIVH. RMB also acted as sole capital structure advisor and debt funder to CIVH. — © 2018 NewsCentral Media
- This is a developing story…