Medu Capital, the South African private equity firm, has acquired a 15% stake in Hero Telecomms for R74.25 million, (approximately $5.75 million at current rates), valuing the wireless internet service provider at R495 million or $38.4 million.
Stellenbosch-based HeroTel was established in 2014 to with the objective of consolidating the fragmented Wireless internet Service Provider (WISP) market. Since then, the company has acquired a total of 10 WISPs and is reportedly working an additional two potential acquisitions currently. The fresh equity capital will be used to fund the company’s ongoing acquisition plans.
In an interview with ITWeb, Alan Knott-Craig, HeroTel’s Chairman noted “The Medu deal strengthens our balance sheet enormously, as well as providing a willing investor for future capital raises. The combination of equity and ‘gearability’ removes capital constraints for growth.”
Medu Capital, which was founded in 2003, invests in private equity deals in established, medium-sized companies across most sectors in South Africa, except for tobacco, liquor, gambling and military weapons businesses. The firm has raised 3 funds to date, the first two of which are fully invested. Medu III, the firm’s latest fund, is a R1.1 billion vehicle actively investing today.