Actis sells fibre operator Octotel for undisclosed sum

Actis, the infrastructure firm leading a consortium that is buying out Telkom’s Swiftnet, has sold out of its investment in local fibre operator Octotel. 

On Monday, a consortium led by African Infrastructure Investment Managers (AIIM), one of Africa’s largest infrastructure-focused private equity fund managers and a division of Old Mutual Alternative Investments, announced it had signed an agreement to acquire Octotel.

The consortium also comprises STOA, an impact fund specialising in infrastructure and energy and Thebe Investment Corporation.

In addition, the consortium has acquired a minority stake in RSAWeb, an SA-focused internet service provider. 

Both transactions — the values of which were not disclosed — are subject to customary regulatory approvals and closing conditions. 

This comes days after JSE-listed Telkom said it had sold its masts and towers business Swiftnet to a consortium of equity investors led and managed by Actis, which has 70% of the purchaser’s shares. The balance is held by Royal Bafokeng Holdings for R6.75bn.

Actis is an infrastructure investment firm focusing on sustainability in energy, transportation, digital, real estate and private equity sectors.

Founded in 2016, Octotel primarily provides fibre to the Western Cape and has passed nearly 350,000 homes with fibre, with about 110,000 customers connected.

When Actis acquired Octotel in 2020, it had 195,000 homes passed and had 56,000 customers. 

Estimates show that more than 2.2-million homes are passed by fibre in SA, with a total of 17-million still to cover. Homes passed is a measure used in the fibre industry to denote the number of potential customers a company has access to by virtue of their service being available in an area.

With this transaction, the consortium says it is committing to support Octotel’s network expansion as well as expanding into new segments, so that the company can remain competitive in the SA market.

“The company’s rapid expansion and the increasing demand for high-speed internet in SA reflect the growing importance of digital connectivity for both personal and professional use. With a strong focus on customer service, a proven network reliability, and an experienced and dynamic management team, Octotel is well positioned to continue its growth,” said the consortium. 

Thor Corry, investment director at AIIM, said: “We are thrilled with the acquisition of Octotel and RSAWeb and look forward to empowering their world-class management team to continue to drive connectivity in the Western Cape and contribute to the ongoing digital transformation in SA. The acquisition represents a landmark transaction for the Ideas Fund and adds to the portfolio’s complement of high-quality growth infrastructure assets.”

The Ideas Fund aims to invest in a diversified portfolio of infrastructure assets in key sectors such as digital infrastructure

Octotel has been the subject of investment interest for some time. 

In addition to changes in ownership, the company secured R2bn in financing from RMB in 2022 to push its network rollout, particularly in outlying parts of SA. At the time, it planned to use the funds to reach 500,000 homes. 

gavazam@businesslive.co.za