African Rainbow Capital, the financial services and private equity venture set up by Patrice Motsepe last year, is acquiring a 20% stake in Rain, a fixed and mobile data network provider which was acquired by the Multisource Group in late 2015. Terms of the deal were not disclosed.
Rain, which was formerly known as Wireless Business Solutions prior to its re-brand in June, is building a LTE-Advanced fixed and mobile network to service the rapidly growing demand from consumers. So far, the firm has overseen the roll out of more that 1,000 sites and 1,500 base stations in South Africa and seems well on track to hit its target of 2,000 sites by the end of the year. Within three years, the firm intends to have 5,000 sites in operation, and the additional capital from the transaction, when combined with existing funding positions the company well to achieve its roll out targets.
Welcoming the investment, Johan van Zyl, African Rainbow Capital’s co-CEO said “…it is exciting to invest in a company that is at the start of its growth trajectory,” adding “There is great demand in our country for fast, reliable and affordable data coverage and Rain promises to deliver just that.”
According to several news reports, African Rainbow Capital is planning to fold its non-financial assets into a separate unit in time for a listing on the Johannesburg Stock Exchange in the near future. The fully black owned and controlled investment company could raise as much as R5 billion or approximately $372 million.