Vodacom has signed an agreement to acquire a 30% co-controlling stake in Vumatel and Dark Fibre Africa for a total transaction value of R10.2 billion, the company announced this week. Vodacom also has an option to acquire an additional 10% stake in InfraCo (the holding company for Vumatel and Dark Fibre Africa), potentially increasing its holding to 40%.
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“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.
In its announcement to shareholders, Vodacom outlined the structure of the transaction, which will occur in several steps.
This will result in Vodacom obtaining a 30% shareholding in InfraCo, where Vodacom will jointly control InfraCo.
- Step 1: CIVH will transfer all of its material assets and operations, including Vumatel and DFA, into a newly created entity: InfraCo.
- Step 2: Vodacom will subscribe for new shares in InfraCo in return for R6.0 billion of cash.
- Step 3: Vodacom will contribute its FTTH, FTTB and Business-to-Business transmission access fibre network infrastructure to the InfraCo, at a valuation of R4.2 billion in return for new shares in InfraCo.
- Step 4: Vodacom will acquire further (secondary) shares from CIVH sufficient to increase its shareholding to at least 30% in InfraCo at a pre-agreed formula.
“The value of the secondary purchase as outlined in step 4 is a function of the valuation of InfraCo as described and so cannot be pre-calculated with certainty,” Vodacom said.
“Based on Vodacom’s current expectations, including the date of closing and the InfraCo valuation, the secondary purchase is estimated to be approximately R3 billion.”
