Metier, an Africa-based private equity firm that backs growth-stage companies in Sub-Saharan Africa struck its seventh bet from its renewable energy and sustainability-focused investment vehicle in a submarine telecommunications cables recycling firm.
The Johannesburg-based investment manager has backed Mertech Marine, a South African recovery and recycling entity for out-of-service submarine telecommunication cables. It deployed from its British International Investment (BII) and Norfund-backed pan-African $156 million Metier Sustainable Capital Fund II, which aims to invest in renewable energy, energy efficiency, resource-efficient infrastructure, and waste management-related entities.
Established in 1998, the Port Elizabeth-headquartered Mertech Marine has been offering turnkey solutions to the submarine telecommunication industry since 2004. As the only turnkey provider of recovery and recycling capabilities in the world, Mertech has processed more than 105,000 kilometers of undersea cable and cleared tens of thousands of tons of cable from cable depots around the globe, according to the company.
Other deployment from Metier’s MSC II include solar energy company Broadreach Energy, clean and cost-effective energy solutions provider for telecom towers Energy Vision, independent power producer Africa Ren, turnkey sewage solutions provider Tecroveer, Cape Town Biogas, and standardized solar PV and battery storage solutions provider Wetility.
“We are partnering with an experienced management team for the next stage of Mertech’s growth at a time when there is increased emphasis on metals recycling and the provision of alternative low-carbon sources of materials, with copper being a fundamental input for the clean energy transition,” said John Hannig, who led the transaction on behalf of Metier.
The Metier’s first Sustainable Capital Fund, a $40 million vehicle that closed in 2013, invested across six companies, including Kathu Solar Park, and Mainstream Renewable Power.
Metier is simultaneously deploying from its recently closed generalist investment vehicle, Metier Capital Growth Fund III (MCG Fund III). It raised over $219 million exceeding its targeted fund size of $200 million.
The fund has already backed three companies in the telecommunications, information technology, and energy sectors with controlling or significant minority private equity holdings. These are software and technology holding company Vivica, energy-as-a-service company Stage Zero, and a mobile infrastructure company AMN. The investment vehicle aims to make eight to twelve equity and equity-related investments into growth-focused mid-market companies in sectors that benefit from population growth and increased urbanization.
The fund will invest in sectors including telecommunications, fast-moving consumer goods, healthcare, non-banking financial services, manufacturing as well as infrastructure and energy across Southern Africa, Eastern Africa, and Central & West Africa. It is scouting for companies that require growth capital and have the potential to deliver top-quartile returns and positive developmental impact
The fund succeeds Metier Capital Growth Fund II, which invested in seven companies, with controlling or significant minority private equity holdings, with 82% allocated to South Africa and 18% outside South Africa. The 2015 fund invested across sectors including retail, out-of-home dining, healthcare, industrial services, FMCG, manufacturing, and telecommunications. Its portfolio includes clothing retail company Retailability, independent telecommunications operator Vox, FMCG player Kenafric, and engineering services company Southey.