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.
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.
“Our agreement with CIVH aligns with Vodacom Group’s strategy to build high quality and resilient fixed and mobile networks with and through selected strategic partnerships across the African continent,” said Vodacom Group CEO Shameel Joosub.
CIVH Group CEO Raymond Ndlovu said the deal will boost their ambitious fibre roll-out programme across the country and help enable affordable access to connectivity in some of the most vulnerable parts of South African society.
“Ultimately, it will result in much needed inclusive economic growth,” Ndlovu said.