Frogfoot, Vox and Hypa secure funding valuing group at R14.4bn to accelerate South African fibre rollout

Frogfoot, Vox and Hypa have secured new equity capital and additional debt funding in a transaction that values the companies at R14.4bn, with the funding set to accelerate fibre deployment across South Africa.

The capital injection will allow Frogfoot to quadruple its annual home connection rate to 360,000 over the next 12 months, with a focus on underserved and lower-income township communities. The expansion is expected to create more than 5,000 direct jobs in local communities.

New investment

The transaction gives the companies a combined after-debt equity value of R8.4bn and includes the subscription for new shares in Frogfoot and Vox, including its wholly owned subsidiary Hypa, by multiple investors.

The largest shareholder grouping is the DNI Consortium, comprising DNI 4PL Contracts, JSE-listed Sabvest Capital, Masimong Group Holdings and Draper Gain International.

The second major shareholder grouping comprises two partnerships managed by the general partners of Metier Capital Growth Fund III. EM-Three Investment Holdings (EM3), founded by Simphiwe Mehlomakulu, is the third-largest direct shareholder.

Management will also hold equity in the businesses, while no single shareholder will hold a controlling interest in Frogfoot or Vox following the transaction.

Abraham van der Merwe will lead the companies as CEO, with Gert Koen as CFO.

Fibre expansion

The additional capital will be used to increase the pace of fibre deployment, particularly in communities that have historically had limited access to high-speed connectivity.

“Every additional home we reach in a township or lower-income community represents another family gaining access to the digital opportunities made possible by fibre,” says van der Merwe.

Frogfoot is South Africa's fourth-largest fibre network operator, providing fibre-to-the-home, fibre-to-the-business and fibre-to-the-tower infrastructure.

Vox provides fixed and wireless connectivity, voice, data, cloud, collaboration and cybersecurity services to businesses, public-sector customers and households.

Hypa Fibre focuses on prepaid fibre products for lower-income households across the Vuma Reach, Openserve and Frogfoot Rise networks.

Investor backing

The transaction brings together existing and new investors, with DNI and Metier among the major shareholder groups.

“Affordable, high-speed internet access is a social imperative,” says Dr Ryan Noach, group CEO of DNI. “We are empowering an experienced management team to accelerate digital inclusion across South Africa.”

RMB, the corporate and investment banking division of FirstRand, acted as financial and transaction adviser and funder.