Investment firm AIIM, consortium acquire 25.8% stake in MetroFibre

SOUTH AFRICA – African Infrastructure Investment Managers (AIIM), along with a consortium comprising South African Housing & Infrastructure Fund (SAHIF), through its Digital Infrastructure Consortium platform and STOA, a foreign investment vehicle based in France, have agreed to acquire a 25.8% interest in fibre network provider MetroFibre Networx (MFN) held by Sanlam Private Equity, African Rainbow Capital and a minority shareholder.

This transaction follows the US$103.9 million equity funding round concluded in December 2020 by AIIM, SAHIF and STOA in order to support MetroFibre’s US$218.6 million capital expansion plan over the next three years.

The transaction also introduces the Old Mutual Hybrid Equity Fund 1 General Partnership, managed by Hybrid Equity (HE), a division of Old Mutual Alternative Investments, as funding provider to SAHIF, which is owned by businessman Rali Mampeule and his partner Kameel Keshav, and is the strategic empowerment partner to MFN.

The acquisition remains subject to regulatory approvals and is envisaged to reach financial close during the second half of 2021.

The investment reinforces AIIM, SAHIF and STOA’s belief in the potential of the digital infrastructure sector in South Africa and their support for the management team of MFN.

MetroFibre, which was launched in 2010, is a high-growth player in South Africa’s fibre-to-the-home and fibre-to-the-business markets.

Over the last 10 years, MetroFibre has expanded its service offering to both residential and corporate customers, in line with its strategic objective of being a diversified operator.

MetroFibre owns and manages its core network, which is a globally compliant Carrier Ethernet 2.0 open access network.

Commenting on the transaction, Ed Stumpf, AIIM investment director, said: “This transaction secures AIIM’s investment vehicle Digital Infrastructure Investment Holdings as the largest single shareholder in MFN and underlines AIIM and the broader Old Mutual Alternative Investment Group’s continued support for the MetroFibre team as a platform for connectivity growth in South Africa.”

“In addition to the significant ramp up in digital volumes as a result of telecommuting during the pandemic, AIIM continues to see strong growth potential for quality high-speed digital infrastructure in South Africa and is excited to work together with the MFN management team and our partners SAHIF and STOA to deliver infrastructure which connects South Africans and enables the digital economy,” he added.

Marie-Laure Mazaud, the deputy CEO of STOA, added: “Over the past three years, STOA supported the management team into building one of the leading national fiber players in South Africa offering affordable, reliable and fast connectivity services, and is more than ever confident on the leading role MFN will play in the challenge of digital transition in the country. STOA is, therefore, delighted to consolidate its position as one of its strategic partners and to take the next steps of the company’s growth alongside AIIM, SAHIF, and the management team.”

“This rationalization of the shareholder base will allow MFN to continue with its growth strategy and play a leading role in the sector’s consolidation process, with a strong leadership and operational team and significant shareholders of reference”

Steve Booysen – CEO, MetroFibre

SAHIF CEO, Rali Mampeule, noted that “As a land fund player, we want to ultimately integrate the use of digital fibre and technology to transform affordable housing into an integrated housing platform. We have created a concept called ‘New Smart City and Smart Living’, a strategy to redefine affordable housing by enabling seamless engagement between the online and offline world. This transaction and the resultant increase of our shareholding in MetroFibre complements this strategy for our group.”

“SAHIF’s increased shareholding in MFN to 22% ownership is another landmark for our group. We are excited to journey with MFN in its efforts to transform and grow the South African digital infrastructure landscape,” said SAHIF CFO Kameel Keshav.

“The additional investment not only signifies our continued support of the MFN management team’s growth ambitions; it also further emphasises SAHIF’s commitment to finding digital infrastructure solutions aimed at accelerating delivery of service land for affordable housing. We are thrilled at entrenching our position as a preeminent participant and contributor in the telecommunications space.”

On his side, Co-head OMAI HE Mujaahid Hassan stated: “We are excited by the prospects this transaction opens up for MFN and SAHIF as its strategic empowerment partner. From our side, HE was able to provide SAHIF, within a very tight timeline, with a well-structured funding solution, allowing them to increase their shareholding in MFN, demonstrating our commitment as a business to empowerment and transformation in South Africa.

“This transaction also ensures that MFN meets its growth targets of delivering quality high-speed digital infrastructure to South Africa and at the same time strengthens its empowerment credentials. Given the scarcity of empowered equity capital available in South Africa historically, HE is committed to providing innovative funding solutions enabling the transformation of ownership in South Africa.”

MetroFibre CEO Steve Booysen concluded by saying: “This rationalisation of the shareholder base will allow MFN to continue with its growth strategy and play a leading role in the sector’s consolidation process, with a strong leadership and operational team and significant shareholders of reference.”

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