If you can’t beat them, buy them

Afrihost is set to acquire a majority stake in Cool ldeas, making it by far the largest independent Internet service provider (ISP) in South Africa.

Afrihost was founded in 1999 by three friends — Gian Visser, Brendan Armstrong, and Peter Meintjes — as a hosting company.

It showed strong growth and became one of the biggest players in South Africa’s retail hosting market.

It was not their hosting products that propelled them to a billion-rand company twenty years later, however. It was their move into broadband.

Internet Solutions executive Greg Payne joined Afrihost as a director in 2008, and they started to explore opportunities in the connectivity market.

In 2009 Afrihost stunned the ADSL market when it started to sell ADSL data at R29 per gigabyte when their competitors were charging between R50 and R80.

Afrihost’s product was an instant hit, and they signed up thousands of customers within weeks to become one of the largest ADSL service providers in South Africa.

Axxess ISP of the Year Award
Axxess ISP of the Year Award

At the time, Axxess was South Africa’s favourite ISP. It won MyBroadband’s ISP of the Year award in 2008 and 2009 and was showing strong growth.

In 2011, Afrihost acquired a controlling stake in Axxess. This deal saw former Internet Solutions CEO Angus MacRobert become an Afrihost shareholder and director.

MacRobert brought a wealth of deal-making experience which would serve Afrihost well in the years to come.

Afrihost dominated the ADSL market and won the coveted MyBroadband ISP of the Year award four years in a row.

Their success caught the attention of big telecommunication players, and, in 2014, MTN bought a controlling stake of 50% plus one share in Afrihost for R408 million.

The partnership did not work out as planned, and in 2016 Afrihost’s directors bought back the 50% stake for R325 million.

Internet Service Provider of the Year – Cool Ideas
Cool Ideas wins MyBroadband’s ISP of the Year award in 2018

There was newfound energy at Afrihost, and they climbed from eleventh in the South African ISP rankings in 2017 to second in October 2020.

Afrihost CEO Gian Visser said while they were happy with their improvement, they will not rest until they are number 1 again.

There was a challenge. Cool Ideas has emerged as South Africa’s top fibre ISP with simple uncapped offerings and excellent customer service. They are a formidable competitor.

Cool Ideas won MyBroadband’s ISP of the Year award in 2018 and 2020 and continue to dominate the rankings in 2021.

In June, Afrihost announced it had concluded a deal where it will acquire a majority stake in Cool Ideas, subject to regulatory approvals.

Cool Ideas will continue to operate as a stand-alone brand and business with the same management team and employees.

All Cool Ideas’ original shareholders, including founders Andre Jooste and Paul Butschi, will retain stakes in the company.

This deal means Afrihost has a controlling stake in 11 of the last 13 winners of the MyBroadband ISP of the Year award.

The table below provides an overview of the winners of the ISP of the Year award since 2008.

MyBroadband ISP of the Year Award Winners
Year Winner Majority Shareholder
2008 Axxess Afrihost
2009 Axxess Afrihost
2010 Mweb Dimension Data
2011 Afrihost Afrihost
2012 Afrihost Afrihost
2013 Afrihost Afrihost
2014 Afrihost Afrihost
2015 Axxess Afrihost
2016 Axxess Afrihost
2017 Axxess Afrihost
2018 Cool Ideas Afrihost*
2019 Supersonic MTN
2020 Cool Ideas Afrihost*
*Should the Afrihost/Cool Ideas deal be approved

Now read: The incredible Afrihost story

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If you can’t beat them, buy them