The Carlyle Group has agreed to buy a majority share in CMC Networks, a South Africa-headquartered provider of managed connectivity services for an undisclosed amount. The deal, which is subject to regulatory approval and other conditions, is expected to close during the first quarter of 2017.
The transaction, which will be the seventh deal for Carlyle’s dedicated sub-Saharan Africa fund, gives Investec Equity Partners a full exit from CMC, which it first backed in 2012. CMC’s management will also be investing alongside Carlyle in the deal.
The investment will help CMC push its growth faster, the impact of fresh capital being boosted further by the firm’s ability to tap Carlyle’s global reach, extensive portfolio and specialist sector expertise to benefit all areas of their strategic expansion plans.
In the statement announcing the deal, Braam Verster, a Director of the Carlyle Sub-Saharan Africa Fund, commented, “CMC manages the largest virtual network in Africa and the Middle East and maintains world class reliability and latency standards on the connections they manage. This, alongside our investment and support, will help facilitate expansion into emerging markets and new service areas.”
CMC Networks was founded in 1989 and has now grown its network and office footprint to 50 countries in Africa as well as having an extensive network in the Middle East. The company’s proprietary network allows global telecom companies to provide reliable, high-quality connectivity to corporate clients across African and the Middle East.
“We are excited about our partnership with CMC and its talented management team,” said Eric Kumpf, Managing Director and Co-Head of Carlyle’s sub-Saharan private equity fund. “We believe the fast-growing data demand in Africa and the Middle East offers tremendous growth opportunities for CMC, and we look forward to using our sector expertise and global network to help them achieve their goals.”
ENSafrica and EY provide Carlyle with advisory services on the deal. CMC was provided financial advice exclusively by The Bank Street Group.