AIIM together with STOA and Thebe expand footprint in South African digital infrastructure sector, acquiring Octotel from Actis

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, and also comprising STOA, a leading impact fund in infrastructure and energy dedicated to developing and emerging markets, and Thebe Investment Corporation, today announced that it has signed an agreement to acquire Octotel, a leading South African fibre network operator. The consortium is acquiring Octotel from Actis, a leading global investor in sustainable infrastructure. In addition, the consortium, led by AIIM, has acquired a minority stake in RSAWeb, a South African focused ISP. Both transactions are subject to customary regulatory approvals and closing conditions. 

Since its inception in 2016, Octotel has emerged as a key player in the fibre-to-the-home (FTTH) and fibre-to-the-business (FTTB) markets, significantly contributing to the digital infrastructure of the Western Cape. The company's open access fibre network passes approximately 350,000 homes and caters to over 110,000 homes and businesses, up from 195,000 and 56,000 respectively when Actis acquired the platform in 2020.

Octotel promotes positive environmental and social impact in the region with recent initiatives including the provision of free 1GB internet connections to more than 150 schools in the Western Cape, converting its fleet of vehicles to LPG hybrid vehicles to decarbonise transportation, and securing one of the first social loans in South Africa in recognition of the company’s work to promote digital inclusion. 

The company's rapid expansion and the increasing demand for high-speed internet in South Africa 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. With this transaction, the consortium is committing to support the network expansion of the company as well as expanding into new segments, so that Octotel can remain a key player in South Africa's digital infrastructure development.

Trevor Van Zyl, CEO of Octotel, affirmed, “Joining forces with AIIM, STOA and Thebe marks an exciting chapter for Octotel and RSAWEB. Together, we are poised to accelerate our mission of delivering cutting-edge connectivity solutions, bolstering economic growth and fostering innovation across the region.”

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 South Africa. 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 Managed Fund seeks to invest in a diversified portfolio of infrastructure assets in key sectors that unlock economic growth and developmental impact, such as, digital infrastructure. “The purpose of the IDEAS Fund is to provide a channel for substantial pools of domestic institutional capital to be invested in tangible, strategic projects in the regional economy. With closed transactions since 2018 now reaching more than ZAR 15 billion, the fund is making a meaningful impact to South Africa’s economic growth,” concluded Corry.

Commenting further, Marie-Laure Mazaud, CEO of STOA, added: “We are glad to be part of this journey alongside our partners AIIM and Thebe with whom we share a common goal for the development of the South African telecommunications sector, and we are looking forward to supporting the management to take advantage of new opportunities to ensure a fruitful growth. This transaction reinforces STOA’s long-term commitment to the deployment of affordable, reliable and fast connectivity in Africa.”

“The core of Thebe’s investment strategy is to Build Communities by partnering with the right teams and investing in highly successful world class businesses that are involved in sectors that drive economic growth and transformation. One of the objectives of the National Development Plan is to bridge the digital divide. Through this transaction, we aim to play our part in expanding the high speed fibre network into greater parts of the Western Cape”, stated Rapulane Mabelane, Thebe‘s Chief Investment Officer. 

David Cooke, Partner, Digital Infrastructure at Actis, added: “Octotel has proved to be an excellent investment for Actis. Together with the exceptional management team, we have been able to scale the platform and generate significant returns for our investors while driving positive social impact. The sale of Octotel adds to the strong track record Actis has in digital infrastructure. Digital represents an important sector for Actis and we’ve got an exciting investment pipeline for the sector, unlocking opportunities globally with US$1.5 billion committed to the sector worldwide. The South African market remains of significant interest and we expect to see considerable growth in South Africa’s digital infrastructure, driven by strong secular tailwinds like rising data consumption and internet penetration.”

The acquisition of Octotel and RSAWEB was supported by Red Wind Capital, serving as the financial advisor.