The news:
- The South African Competition Commission has given conditional approval for the deal for a consortium led by African Infrastructure Investment Managers, comprising STOA and Thebe Investment Corporation, to acquire Octotel from Actis, a UK-based investment firm.
- The deal follows a significant expansion of the Octotel since Actis invested in it four years ago.
Global investor Actis announced in March 2024 that it had agreed to sell Octotel, its South African fibre network operator, to the consortium, pending regulatory approval.
Disclosing its decision to greenlight the deal, the competition watchdog believes the proposed transaction won’t “substantially lessen or prevent” competition in the telecommunications infrastructure market.
“To address employment concerns, the merged entity shall not retrench employees as a result of the merger, for two years following the merger implementation date,” the competition regulator adds.
Additionally, the consortium is buying a minority stake in RSAWeb, an Internet service provider, subject to customary regulatory approvals and closing conditions.
This comes on the heels of Actis announcing its acquisition of Swiftnet — Telkom’s masts and towers business — for R6.75 billion ($374.3 million). That deal has also since received Competition Commission approval.
In December 2020, Actis bought a majority stake in Octotel for R2.3 billion ($128.5 million) to take advantage of the growing demand for high-speed connectivity and the rapid rise in data consumption in South Africa.
The firm's investment strategy concentrated on increasing the number of homes connected with fibre lines and boosting the network's adoption rate.
This strategy has reportedly resulted in significant growth for the company, with the number of homes passed with fibre rising to 350,000 at investment from 195,000. Connected customers grew from 56,000 to 110,000 over the same period.
The full transaction structure, according to the Competition Commission, notes that the primary acquiring firm is controlled by STOA and IDEAS Infrastructure II GP (Pty) Ltd (IDEAS), a domestic private infrastructure fund managed by AIIM, a private equity fund manager ultimately controlled by Old Mutual.
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About the collaboration, Trevor van Zyl, CEO of Octotel, said, “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.”
