Community Investment Ventures Holdings (CIVH) has acquired 34.9% of Vumatel for an undisclosed amount.
The company has also entered into an agreement with Vumatel shareholders to acquire the remaining 65.1% of Vumatel, subject to funding and regulatory approvals.
CIVH is owned by a group of investors – Remgro, New GX Capital Holdings, Chlanich, Community Investment Holdings (CIH), and Consolidated Capital Investments.
CIVH’s investment in Vumatel complements the group’s existing portfolio, comprising wholly-owned subsidiary Dark Fibre Africa (DFA).
The announcement follows a MyBroadband report in May that CIVH was in discussions to acquire Vumatel.
Vumatel has built one of the largest open access fibre networks in South Africa, with a strong focus on fibre-to-the-home services.
Vumatel also recently completed planning for the first phase of its fibre network build for Alexandra.
Announced in September 2017, Vumatel plans to offer uncapped fibre services to the residents of Alexandra for R89 per month.
It aims to do this in a way that is commercially-sustainable, without subsidising the township network with profits from clients in affluent suburbs.
An acquisition of Vumatel by CIVH will significantly strengthen Remgro’s position in the South African fibre market.
Vumatel’s fibre network spans over 8,000 kilometres, over a residential footprint which it leases to ISPs – who in turn sell Internet products to the consumer.
“Vumatel took the early lead in the fibre market in South Africa,” said Niel Schoeman, executive chairman of Vumatel.
“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.”
“In addition, the acquisition will enable Vumatel and DFA to reach more customers with better products in the SMME market” said Khudu Pitje, CEO of New GX.