Vodacom acquiring co-controlling share in Vumatel and DFA for R13.2 billion

Vodacom has agreed on terms to acquire a 30% co-controlling stake in Vumatel and Dark Fibre Africa for a total transaction value of R10.2 billion.

“Subject to regulatory approvals, Vodacom Group will hold a co-controlling 30% equity interest in a newly formed InfraCo entity into which all of the material assets currently owned by Dark Fibre Africa (DFA) and Vumatel will be transferred in addition to certain Vodacom owned fibre assets,” the company announced.

Vodacom has an option to acquire an additional 10% stake in InfraCo, potentially increasing its holding to 40%.

The mobile and fibre network operator will pay for the transaction through a combination of R6 billion cash and the contribution of its fibre infrastructure assets to InfraCo at a valuation of R4.2 billion.

This includes Vodacom’s fibre-to-the-home (FTTH), fibre-to-the-business and Business-to-Business transmission access fibre network infrastructure.

In return, Vodacom will receive new shares in InfraCo.

Vodacom will acquire additional secondary shares from Community Investment Ventures Holdings (CIVH), sufficient to increase its shareholding to at least 30% in the InfraCo at a pre-agreed formula.

CIVH is the Remgro-controlled holding company that owns Vumatel and DFA, and it will hold the remaining 70%.

In its announcement to shareholders published on the JSE SENS news service, Vodacom explained that the transaction is structured as a number of steps.

These will all occur after receiving regulatory approvals. This will result in Vodacom obtaining a 30% shareholding in InfraCo, where Vodacom will jointly control InfraCo alongside :

  • Step 1: CIVH will transfer all of its material assets and operations, including Vumatel and DFA, into a newly created entity: InfraCo.
  • Step 2: Vodacom will subscribe for new shares in InfraCo in return for R6.0 billion of cash.
  • Step 3: Vodacom will contribute its FTTH, FTTB and Business-to-Business transmission access fibre network infrastructure to the InfraCo, at a valuation of R4.2 billion in return for new shares in InfraCo.
  • Step 4: Vodacom will acquire further (secondary) shares from CIVH sufficient to increase its shareholding to at least 30% in InfraCo at a pre-agreed formula.

“The value of the secondary purchase as outlined in step 4 is a function of the valuation of InfraCo as described and so cannot be pre-calculated with certainty,” Vodacom said.

“Based on Vodacom’s current expectations, including the date of closing and the InfraCo valuation, the secondary purchase is estimated to be approximately R3 billion.”

The total purchase price paid by Vodacom, including the value of the transfer assets, equates to R13.2 billion.

Vumatel has grown to become South Africa’s biggest last-mile fibre network operator by the number of homes it passes — 1.2 million.

It builds, owns and operates a high-speed FTTH network using a wholesale open-access model, and has deployed over 31,000 kilometres of fibre infrastructure across South Africa.

In terms of the agreement, Vumatel’s fibre network will be merged with Vodacom’s fibre-to-the-home and fibre-to-the-business assets.

DFA is a major provider of carrier-grade dark fibre, specialising in building, installing, and operating a national metro fibre network spanning 13,000 km and 37,000 connected circuits and supplying a range of dark fibre and actively managed fibre products to enterprise customers.


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Vodacom acquiring co-controlling share in Vumatel and DFA for R13.2 billion