Afrihost has concluded a deal with CipherWave for an undisclosed sum that will see it take a majority stake in Internet service provider Home-Connect.
In a note to staff, Afrihost said the acquisition is subject to the necessary regulatory approvals and that they are working to finalize the transaction as soon as possible.
According to regulatory filings, Home-Connect will continue to operate as a stand-alone business.
The companies did not disclose what Afrihost’s shareholding will be when the deal closes.
The deal is only for CipherWave’s fibre ISP and comes two years after Afrihost bought a majority stake in Cool Ideas for an undisclosed amount.
Afrihost also holds a majority stake in Axxess, another of South Africa’s premier Internet and hosting providers.
Much like the Cool Ideas deal, Home-Connect and Afrihost say they hope to leverage the economies of scale of a larger network to continue providing fast, uncapped Internet services at affordable prices.
CipherWave launched Home-Connect in May 2016, offering uncapped fibre-to-the-home services on Vumatel, Metrofibre Networx, and Waterfall Access Networks.
Since then, Home-Connect has expanded its offering to 28 fibre network operators, including other major infrastructure providers like Frogfoot and Openserve.
CipherWave CEO Wayne D’Sa told MyBroadband that Home-Connect’s customer base has grown to over 50,000 subscribers in the past seven years.
Beginning in founder Jonathan Mason’s 3×3m room in 2009 and officially launched in 2010, CipherWave started with a single employee — Mason himself.
To launch the company, Mason borrowed R750,000 from his dad to set up the business and fund its network operations.
Mason initially ran all aspects of CipherWave himself, but after signing his third large customer in 3 months, he needed help.
The two of them did everything — operations, accounts, marketing and sales, and a 24/7 technical support desk.
“It started to get hectic, and after 6 months, we employed CipherWave’s third employee. This was the start of big growth for the company — both in terms of customers and employees,” Mason told MyBroadband in a 2019 interview.
Mason said it took only eight months to break its R1-million revenue target, and the company’s rapid expansion meant he could pay back his father back in 18 months at prime + 5%.
CipherWave grew to employ 70 people across its portfolio, which includes Home Connect Reach, Aggregation Networks, Talk Talk, and CipherWave Business Solutions.
It also acquired Broadlink from Rain in 2020.
According to regulatory filings, Afrihost and CipherWave said the transaction will not give rise to any retrenchments in South Africa.
“The acquisition won’t change anything for either the clients or team members of Afrihost or Home-Connect,” Afrihost CEO Gian Visser told MyBroadband.
Visser emphasized that Home-Connect will continue to run as a stand-alone brand and business.
In response to questions about when they think the deal will close, Visser said they were hoping for before August.
“The deal has been lodged with the Competition Commission and will be finalized once that process is completed,” he said.
“We envision this to take anywhere between 30 to 90 days.”