R6.5 billion Vumatel and Lanseria deal

A group of investors led by South African private equity firm Harith General Partners is buying out an infrastructure fund with stakes in Vumatel, Dark Fibre Africa, and Lanseria International Airport.

The deal, worth R6.5 billion, provides an exit opportunity for investors in the first Pan African Infrastructure Development Fund (PAIDF1), which includes South Africa’s Government Employees Pension Fund, Absa, Old Mutual and others.

The fund includes a 15.3% share of Community Investment Venture Holdings (CIVH). It owns fibre infrastructure companies Vumatel and Dark Fibre Africa (DFA), IoT network operator Sigfox South Africa, and full-service optical fibre company Britelink MCT.

Vumatel, in turn, has an over 49% stake in closed-access fibre network operator Herotel.

CIVH also owns Maziv, a company established specifically to hold its fibre assets from Vumatel and Dark Fibre Africa.

This was necessary for Vodacom’s proposed acquisition of a 30% to 40% stake in Vumatel and DFA’s parent company, which has been blocked by the Competition Tribunal.

The deal between Vodacom and CIVH would have seen the companies pool their fibre networks, with Vodacom owning a 30% to 40% stake in the combined entity.

Vodacom had offered a combination of assets and cash of at least R13.2 billion for a 30% shareholding.

That included an initial cash consideration of R6 billion, Vodacom’s fibre assets worth R4.2 billion, and a secondary purchase based on CIVH’s valuation when the deal went through, estimated to be roughly R3 billion.

Vodacom also had the option to increase its stake to 40%.

Remgro, which has an effective 57% stake in CIVH, previously warned that without Vodacom’s investment, Vumatel’s initiative to roll out fibre to South African townships would face significant delays.

Remgro CEO Jannie Durand stated that, had the Vodacom deal been approved 18 months ago, CIVH would have already invested an additional R3 billion to R4 billion in its fibre networks — most of that in townships.

Pieter Uys, Remgro’s head of strategic investments, previously told MyBroadband that with Vodacom’s cash injection, Vumatel would be able to roll out to most of South Africa’s townships in 3–4 years.

Without the investment, that time horizon balloons to 8–10 years.

“Harith InfraCo’s acquisition of the PAIDF assets is also remarkable for its timing, said Harith General Partners CEO Sipho Makhubela.

Makhubela said the deal comes during a period of sluggish fundraising and exit activity within the private equity space.

According to Makhubela, this transaction, with Harith’s 2022 disposal of its shareholding in subsea cable operator MainOne to Nasdaq-listed Equinix, cements its 18-year track record.

Aside from its CIVH stake, PADF1 also has a 37.92% stake in Anergi, which owns the Kelvin power station in Johannesburg, and a 37.5% stake in Lanseria Holdings, the owners of Lanseria International Airport.

Lanseria is the only privately-owned international airport in the country and is the second-largest airport in Gauteng.