Sanlam Private Equity, African Rainbow Capital and a minority shareholder have sold a 25.8% stake in MetroFibre Networx to a consortium of existing shareholders. The consortium includes African Infrastructure Investment Managers (AIIM), one of Africa’s largest infrastructure-focused private equity fund managers, along with a consortium comprising South African Housing & Infrastructure Fund (SAHIF), through its Digital Infrastructure Consortium platform and STOA, a foreign investment vehicle-based in France.
This transaction follows the R1.5 billion equity funding round concluded in December 2020 by AIIM, SAHIF and STOA in order to support MetroFibre’s R3 billion capital expansion plan over the next three years.
MetroFibre, which launched in 2010, is a high-growth player in South Africa’s Fibre-To-The-Home (FTTH) and Fibre-To-The-Business (FTTB) markets. Over the last 10 years, MetroFibre has expanded its service offering to both residential and corporate customers in line with its strategic objective of being a diversified operator.
“This rationalisation of the shareholder base will allow MetroFibre Networx to continue with its growth strategy and play a leading role in the sector’s consolidation process, with a strong leadership and operational team and significant shareholders of reference,” MetroFibre CEO, Steve Booysen.
The transaction also introduces the Old Mutual Hybrid Equity Fund 1 General Partnership, managed by Hybrid Equity (HE), a division of Old Mutual Alternative Investments (OMAI), as funding provider to SAHIF, which is owned by Rali Mampeule and Kameel Keshav and is the strategic empowerment partner to MetroFibre Networx.
“As a land fund player, we want to ultimately integrate the use of Digital Fibre and Technology to transform affordable housing into an Integrated Housing Platform,” SAHIF CEO, Rali Mampeule, said.
“We have created a concept called “New Smart City and Smart Living,” a strategy to redefine affordable housing by enabling seamless engagement between the online and offline world.
“This transaction and the resultant increase of our shareholding in MetroFibre compliments this strategy for our group.”
The investment reinforces AIIM, SAHIF and STOA’s belief in the potential of the digital infrastructure sector in South Africa and their support for the management team of MetroFibre Networx.
“This transaction secures AIIM’s investment vehicle Digital Infrastructure Investment Holdings as the largest single shareholder in MetroFibre Networx and underlines AIIM and the broader Old Mutual Alternative Investment Group’s continued support for the MetroFibre team as a platform for connectivity growth in South Africa,” Ed Stumpf, AIIM’s Investment Director, said.
“In addition to the significant ramp-up in digital volumes as a result of telecommuting during the pandemic, AIIM continues to see strong growth potential for quality high-speed digital infrastructure in South Africa and is excited to work together with the MetroFibre Networx management team and our partners SAHIF and STOA to deliver infrastructure which connects South Africans and enables the digital economy.”
The acquisition remains subject to regulatory approvals and is envisaged to reach a financial close during the second half of 2021.
“Over the past three years, STOA supported the management team into building one of the leading national fibre players in South Africa offering affordable, reliable and fast connectivity services, and is more than ever confident on the leading role MFN will play in the challenge of digital transition in the country,” Marie-Laure Mazaud, Deputy CEO of STOA, said.
“STOA is therefore delighted to consolidate its position as one of its strategic partners and to take the next steps of the company’s growth alongside AIIM, SAHIF and the management team.”
MetroFibre owns and manages its core network which is a globally compliant Carrier Ethernet 2.0 open access network.
“SAHIF’s increased shareholding in MetroFibre Networx to 22% ownership is another landmark for our group. We are excited to journey with MetroFibre Networx in its efforts to transform and grow the South African digital infrastructure landscape,” said SAHIF CFO, Kameel Keshav.
“The additional investment not only signifies our continued support of the MetroFibre Networx management team’s growth ambitions. It also further emphasises SAHIF’s commitment to finding digital infrastructure solutions aimed at accelerating the delivery of service land for affordable housing. We are thrilled at entrenching our position as a preeminent participant and contributor in the telecommunications space.”