The largest private equity fund in the world has bought control of African carrier CMC Networks for more than $100 million.
The Carlyle Group, based in Washington DC, would say only that "the transaction value exceeds $100 million" and that the investment would give it "a majority shareholding". Carlyle and CMC Networks refused to provide more details.
Grant Walker, founder and CEO of CMC, said: "This investment by Carlyle will accelerate CMC’s growth through greater investments into new partnerships and acquisitions."
The money comes from Carlyle’s Sub-Saharan Africa Fund, which has already invested almost $300 million of its $698 million of committed capital "across a variety of industries" – making it likely that CMC is one of its largest investments since the fund was set up five years ago.
A statement from the two companies says that CMC, founded in 1989, has the largest managed connectivity network in Africa, with a footprint spanning some 70 countries in Africa and the Middle East. It plans to extend into Asia and South America. It interconnects with 50 of the world’s carriers.
The company operates more than 100 points of presence and 2,000 circuits. Through its carrier customers, it serves more than 400 enterprises, including over half among the Fortune 500.
"CMC has cultivated a blue-chip customer base driving international traffic into Africa but is also presently experiencing a growing amount of traffic leaving Africa from African customers," said Walker. "Over the last 28 years, CMC has grown its network organically, and has responded to this region’s increasing appetite for reliable and secure internet connectivity."
Martin Springer, managing director of CMC, said: "We believe this investment from Carlyle is opportune as it will allow us to rapidly pursue new markets, products and avenues for growth."
Eric Kump, managing director and co-head of Carlyle’s Sub-Saharan Africa Fund, said: "We believe 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."
According to Carlyle’s own website, 15% of the whole group’s investments, which total $169 billion, are in media and telecoms – implying a total in the sector of around $25 billion.
Current investments in the sector include French telecoms group Altice and US mobile services company Syniverse. Previous investments range from Swedish cable operator Com Hem – now a public company – to PanAmSat, acquired, in partnership with other private equity investors, in 2004 for $500 million plus bank loans and bonds, and bought by Intelsat in the following year for $4.3 billion.
Carlyle is famous for the prominence of some of its advisors. Past and present advisors include George HW Bush, former US president; James Baker, former US secretary of state; William Kennard and Julius Genachowski, former chairmen of the Federal Communications Commission; John Major, former UK prime minister; and – until 2001 – Thaksin Shinawatra, founder of mobile operator AIS who was prime minister of Thailand from 2001 until overthrown in a coup in 2006. He is now living in exile.