Frogfoot, Vox and its subsidiary Hypa have secured a major capital injection that will enable the acceleration of high-speed fibre broadband access to previously underserved and lower-income township communities.

The capital injection will enable Frogfoot to increase its pace of home connections fourfold to 360 000 homes a year and create more than 5 000 direct jobs in local communities.

According to a statement released by companies on Monday, the transaction implies a combined after-debt equity value of R8.4-billion for the companies and supports the ongoing participation of leadership in both companies.

The transaction includes a subscription for new shares in both Frogfoot and Vox, including its wholly-owned subsidiary Hypa, by multiple incoming investors.

The largest shareholder grouping is the DNI Consortium, which comprises DNI 4PL Contracts, JSE listed Sabvest Capital, Masimong Group Holdings and Draper Gain International. The second major shareholder grouping comprises two partnerships managed by the general partners of Metier Capital Growth Fund III.

Private investment company EM-Three Investment (EM3) is the third largest direct shareholder.

The transaction incorporates direct management equity participation, further aligning executive leadership with long-term shareholder value; however, no shareholder will hold a controlling interest post-implementation.

The additional capital raised strengthens the companies materially and allows them to significantly step up its rollout velocity, explains Abraham van der Merwe, who will lead the companies as CEO, alongside Gert Koen as CFO.

“This capital raise is designed for societal impact at scale. Every additional home we reach in a township or lower-income community represents another family gaining access to the digital opportunities made possible by fibre.”

"DNI, Frogfoot and Vox share a conviction that affordable, high-speed Internet access is a social imperative. DNI’s philosophy is to partner with and support world-class founders and managers. By bringing complementary experience in the telecommunications sector alongside high-quality financial partners, we are empowering an experienced management team to accelerate digital inclusion across South Africa,” says DNI Group CEO Dr Ryan Noach.

Metier principal Grant Howarth adds that the collective effort will empower the companies to expand further across South Africa’s underserved regions with an impact that will be felt in the everyday lives of those communities.

“Metier is proud to renew its commitment to Frogfoot and Vox, having witnessed their remarkable evolution over the last 20 years. We look forward to reinvesting alongside the high-calibre leadership team and are eager to collaborate with our new partners to leverage their unique operational synergies.”

“Frogfoot, Vox and Hypa have built strong, resilient businesses that play an important role in expanding digital access across South Africa. This transaction brings together high-quality investors who share a long-term vision for the Group and provides the capital required to accelerate growth significantly,” continues EM3 founder Simphiwe Mehlomakulu.

“We are particularly excited about the opportunity to deepen connectivity in underserved communities, creating meaningful economic and social impact while delivering sustainable value for all stakeholders.”

RMB, the corporate and investment banking division of FirstRand, served as the financial and transaction adviser and funder to the companies.