Africa Online, the Internet service provider (ISP) based in Kenya, has announced the acquisition of MenaNet Communications, an Egyptian ISP.
UUNet Africa, the joint venture with UUNet South Africa, will not immediately be affected.
Africa Online says the deal, with a maximum consideration of $8.7 million (R68 million), will be settled through a combination of cash and shares. Africa Online is funded by The African Lakes Group, which is listed on the London and Nairobi stock exchanges.
According to Africa Online, MenaNet began trading in April 1999 and is currently the second largest ISP in Egypt with 7 300 dial-up subscribers. The company also claims 9 000 users on a toll-based Internet access service operated with Telecom Egypt, and it is involved in a joint venture to deliver broadband satellite access to the region via NileSat.
Africa Online corporate communications manager Sam Nganga says the deal should not be seen in terms of $1 190 (R9 340) per subscriber, but as a new opportunity.
"We are buying entry into a market larger than anything in Africa outside of SA," he says. "MenaNet is involved in various businesses. There is an awful lot going on other than dial-up subscribers."
UUNet South Africa and Africa Online concluded a joint venture in December, which included a 10-year network services agreement by which UUNet will supply Africa Online with its dial-up infrastructure. Nganga says UUNet Africa will not play an immediate part in the acquisition.
"For the moment it has been excluded, but once [MenaNet] is part of the Africa Online stable that will change. The UUNet deal will eventually cover all of our operations."
MenaNet is to become a wholly-owned subsidiary of Africa Online, but will retain its identity and will offer services in the Middle East and Northern Africa under its existing brand name, while the Africa Online brand is expanded throughout sub-Saharan Africa.
Africa Online operates in eight other countries, Kenya, Uganda, Tanzania, Swaziland, Zimbabwe, Zambia, Ghana and the Ivory Coast, and plans to roll-out into at least five more countries this year. Chief executive Ayisi Makatiani says Egypt will serve as a foundation for expansion throughout North Africa and the Middle East.
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