November 10, 2014

The weekly roundup of Africa's Private Capital news

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Here's the latest weekly digest of the most significant private equity, venture capital and infrastructure financing deals and investment news stories related to Africa over the last seven days. We'd be delighted if you shared it with interested colleagues and/or partners, so please feel free to forward the newsletter on to them. If they would like to receive their own weekly copy they're more than welcome to sign up here.

We're trying to make this as useful a tool as possible for private capital market professionals focused on Africa. Send tips, suggestions and feedback to me at [email protected].

Many thanks for reading.

The week in brief...

There were a number of private capital deals in Africa last week. The deal that took most of the limelight last week was Actis' acquisition of a significant minority stake in Tekkie Town for $65 million. With 265 stores in South Africa, 10 in Namibia and 1 in Lesotho, the fresh capital gives the shoe retailer the funds to expand more broadly in southern Africa and possibly West and East Africa too. Terms of the deal have not been reported so far. Meanwhile, in its eleventh transaction in its second fund, and its third outside of South Africa, Vantage Mezzanine has agreed to provide $30 million in expansion capital to Ghana's Surfline Communications. The capital will be used to expand the company's 4G LTE network as well as boost its product distribution and marketing activities.

Egypt was a hot bed of deal activity last week. In what must be the penultimate stage of a deal we've been following in the last couple of weeks, Abraaj formally offered to buy 100% of Egyptian cake and biscuit manufacturer Bisco Misr for approximately $118 million. The per share offer price is lower than the closing price the day before the bid. If you remember, in the prior week, shareholders owning 56% of the shares had offered to sell, dependent on submission of a formal offer. It'll be interesting to see what happens next. Either way, to do the deal, Abraaj will require a minimum stake of 51%. In two other potential deals, Pioneers Holdings has made an offer to acquire 60.2% of Arab Dairy for approximately $28 million, and TVM Capital Healthcare Partners has made an undisclosed offer to acquire stakes in Ameco Medical Industries.

Two recent industry reports feature in the sectors and strategies section of this week's digest. Firstly, the GSMA's Mobile Outlook report for sub-saharan Africa. Business Day has an interesting piece on some of the data points from the report and how the technology will continue to improve country GDPs, employment and the lives of millions of people in Africa. And fresh from presentation at one of their conferences in early October, KPMG Africa's report on the outlook for power in sub-saharan Africa became availabe for download from their website last week. Links to both can be found in the abstracts below.

And finally, a piece in Reuters on how, despite the alarming epidemic and security-threat headlines emanating from Africa in the last few months, most investors are looking past them to focus on the factors that gave rise to the 'Africa Rising' narrative and continuing to pursue investment opportunities on the continent. A reassuring note to end this week's overview on.

To find out more about these and other stories, please scroll down and review the headlines, abstracts and links to the original articles.

Deal News...

Private Equity

Abraaj offers $118mln for 100% of Bisco Misr // reuters.com

As reported in last week's digest, shareholders holding 56% of Bisco Misr agreed to sell their shares to Abraaj Investment Management. In response the investment company has now made a formal offer to acquire 100% of the Egyptian Bakery company for $118.88 million or 73.91 egyptian pounds per share. In a statement, Abraaj said it would accept no less than a 51% controlling stake.

Read more...

Private Equity

Actis spends $65mln for stake in Tekkie Town // bdlive.co.za

Private equity firm Actis is spending $65 million for a significant monority stake in South African shoe retailer, Tekkie Town. The capital will be used to fuel the firm's growth plans for the southern african region as well as possible future expansion to West and East Africa.