Carlyle agrees second African deal of the year

Global buyout house The Carlyle Group has agreed its second African deal of the year, acquiring a majority stake in CMC Networks from fellow private equity house Investec Private Equity.

Financial details of the transaction were not disclosed.

CMC Networks is a pan-African connectivity provider for global telecoms companies. Headquartered in Johannesburg, South Africa and Mauritius, CMC has a network and office footprint spanning 50 African countries, as well as a Middle Eastern network.

In a statement, CMC founder and chief executive officer Grant Walker said the company would use Carlyle’s investment to accelerate growth and “leverage the benefits” of a global partnership.

“Carlyle’s global presence, extensive portfolio and specialist expertise in this sector will bring additional benefits in all areas of our targeted and strategic expansion plans,” he said.

Braam Verster, a director of the Carlyle Sub-Saharan Africa Fund, added: “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.”

The investment in CMC follows Carlyle’s agreement in September to acquire a majority share of Amrod, a South African supplier of promotional products and clothing.

CMC is the seventh investment from Carlyle’s Sub-Saharan Africa Fund, which closed significantly above its $500 million target on $698 million in April 2014.

Other investments in the fund include pan-African logistics company J&J Africa, Nigerian commercial bank Diamond Bank, and South African tyre retailer and wholesaler TiAuto, which it acquired together with Old Mutual Private Equity from Ethos Private Equity.