07 February 2017
| Alan Burkitt-Gray
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
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
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
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
"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
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
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.