Telkom in talks with Actis to sell towers business

Private equity firm Actis is in talks to buy Swiftnet, the mast and tower business owned by South Africa’s Telkom, according to people familiar with the matter.

The deal would also include a smaller, local partner, according to the people who declined to be identified because they’re not authorized to speak on the matter. Swiftnet is valued at as much as 6.3 billion rand ($332 million), Telkom said previously. 

Actis and Telkom declined to comment on the matter. 

Telkom started a competitive disposal process for Swiftnet in November when it said it was in exclusive talks with a preferred bidder that comprised a group of equity investors “including a Black economic empowerment partner, led and managed by a reputable private equity firm.”

There’s no guarantee the talks will conclude successfully. 

Africa has a fast-growing, youthful, and increasingly tech-savvy population, and firms have been buying into digital infrastructure assets to tap the rising demand for broadband as smartphones become more widespread.

Actis has been growing its digital infrastructure portfolio in South Africa, buying fibre company Octotel in 2020. 

Meanwhile, mobile companies have increasingly sought to spin off their towers to focus on their core business, with Vodafone’s African unit Vodacom saying in 2022, it plans to separate its towers portfolio into a new unit. 

In 2022, MTN Group Ltd. concluded a sale and lease-back deal with IHS Holding Ltd. for more than 5,700 of its tower sites in South Africa. 

IHS Towers had also expressed interest in Telkom’s Swiftnet deal, Bloomberg reported previously.