The
weekly roundup of Africa's Private Capital news
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Here's this week's wrap of the most interesting Africa-related private equity, infrastructure and venture capital deal stories, market opinion articles and information pieces for our review. Thank you for being a reader and we hope you continue to find the newsletter useful.
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This week's issue supported by...
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Deals in food retail and distribution companies seemed to dominate private capital investment news in Africa last week. Not surprising, we suppose, given that it's one of the largest consumer sub-sectors, growing between 9% and 10% annually in recent years. Private Equity investor Actis
is spending $54 million to acquire a significant minority stake in Food Lover's Market, one of Africa' largest independent food retail groups.
It operates more than 120 stores in 11 countries selling fresh produce and a complementary range of bakery, grocery, butchery and deli products. In addition, the firm operates over 200 FreshStop convenience stores in Caltex service stations as well as Market Liquors, a convenience liquor offering, an import export business and a recently-acquired artisinal coffee brand, Seattle Coffee. The exact size of the stake and valuation details of the transaction remain undisclosed at this point.
Meanwhile, investment holding company Coast2Coast agreed to two food-related transactions last week through its consumer brand platform Bounty Brands. Both deals turned out to be first for C2C, most notably its investment in Poland's
Sonko, a producer of rice cakes, rice, groats and dry bread products, which is the company's first investment overseas. It seems that
Coast2Coast and Bounty Brands will now set up an office in Europe to pursue complementary acquisitions as part of their overall strategy to diversify earnings. And in their second first, Coast2Coast and Bounty made their debut investment in South Africa's food sector with the acquisition of a stake in Liberty Foods, a food importer and distributor. Together, the two food acquisitions are expected to add R850-million ($59 million) a year to Bounty's annual revenue, bringing total revenue to just short of R2-billion ($139 million). The deals form part of the company's strategy to grow revenue to over R5 billion in the next two years in the run-up to an eventual listing.
In other consumer sector-focused deals, Old Mutual Private Equity
has acquired a 70% stake in MoreCorp, a South African Gold and Cycling retailer, for R300 million or approximately $21 million.
The transaction, which is being made through the private equity arm's R4 billion Fund IV, is seen as being a bet on the resilience of the country's upper-middle class in the face of South Africa's current economic downturn. And AfricInvest, the Tunis-headquartered mid-cap private equity firm
has completed the acquisition of a minority stake in Salvador Caetano Auto Africa (SC Africa), an auto distributor and retailer that has been active in a number of high-growth African markets since 1990. Again terms of the deal were not disclosed.
Meanwhile, M-KOPA, a pay-as-you-go
rooftop solar provider has landed $19 million in its latest round of funding. The capital will be used to expand the company's management team as well as support the development of the firm's product range and its international operations. This latest round was
led by Generation Investment Management, a fund founded by former United States Vice President Al Gore and David Blood. Virgin's Richard Branson and AOL's Steve and Jean Case are also among the new investors in the round, which also saw a number of reinvestments from existing shareholders.
In fundraising news, CrossBoundary Energy announced the first close at $8 million for its first fund, CrossBoundary Energy Fund I, which, after leverage, aims to invest over $25 million in solar assets in the next 18 months.
The 20-year fund does not have a targeted number of projects, but expects to make between 10 and 15 investments over the next 12 to 18 months. Typical investment size is anticipated to be between $1 million and $2 million, but could vary substantially, ranging from as low as $200,000 for smaller clients up to $10 million or more for larger systems required by industrial and mining projects.
The fund, which has a hard cap of $10 million in equity, is a pilot fund targeting infrastructure level returns and is designed to demonstrate the potential of the asset class in Africa, acting as a pre-cursor to the raise of a larger fund.
And finally this week, an interesting piece in the Financial Times penned by Aubrey Hruby, co-founder of the Africa Expert Network on the five common myths about China's relationship with Africa which have now become assumptions even at the highest levels of policy-making. She neatly debunks them for us.
To read more on these and other stories from the last week, please scroll down for the abstracts and links.
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M-KOPA lands $19 million from Generation Investment and others
Image Credit: M-KOPA
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Private Equity
Coast2Coast makes first international acquisition
South African Investment Holding company, Coast2Coast announced the acquisition two food companies by Bounty Brands, its consumer brands business in deals totaling a reported R1.2 billion or $83.5 million. As well as acquiring South Africa's Liberty Foods, Bounty has closed its first international acquisition with the acquisition of Sonko, a producer of rice cakes, rice, groats and dry bread products in Poland under the Sonko, Risana, Albaris and PopCool brands as well as private label business with major Polish retailers.
No additional terms of the deal were reported.
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Private Equity
Actis backs Food Lover's Market with $54mln
Private Equity firm Actis is spending $54 million to acquire a significant minority stake in Food Lover's Market, one of Africa' largest independent food retail groups. The capital will be used to fund the company's growth plans in South Africa and elsewhere in sub-Saharan Africa. Additional terms of the transaction were not disclosed.
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Private Equity
OMPE pays $21mln for 70% MoreCorp stake
Old Mutual Private Equity has acquired a 70% stake in MoreCorp, the South African Golf and Cycling retailer best known for brands that include The Pro Shop, World of Golf, Playmoregolf and Cycle Lab, for R300 million or approximately $21 million. The transaction, which is being made through the private equity arm's R4 billion Fund IV, is seen as being a bet on the resilience of the country's upper-middle class in the face of South Africa's current economic downturn.
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Private Equity
AfricInvest takes minority stake in auto distributor
AfricInvest, the pan-African mid-cap private equity firm, has completed the acquisition of a minority stake in Salvador Caetano Auto Africa (SC Africa), an auto distributor and retailer in a number of high-growth African markets since 1990, which is a subsidiary of Portuguese auto retailer, the Salvador Caetano Group. Terms of the transaction were not disclosed.
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Venture Capital
M-KOPA raises $19mln from Generation Investment
For its latest round of financing, M-KOPA Solar, a pay-as-you-go rooftop solar provider has landed $19 million from a consortium of investors led by Generation Investment Management, a fund founded by former United States Vice President Al Gore and David Blood. Virgin's Richard Branson and AOL's Steve and Jean Case are also among the new investors in the round, which also saw a number of reinvestments from existing shareholders.
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DFI
DFIs sign financing agreements for Cap des Biches
OPIC and the IFC signed financing agreements with ContourGlobal, the Government of Senegal and Senegal's national electricity utility to support the development and construction of the 53MW Cap des Biches power plant and address growing demand for electricity in the country. Under an innovative financing model, IFC is providing a cross currency swap while OPIC will lend up to $91 million to back the project.
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Funds & Fundraising news...
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Private Equity
CrossBoundary raises first energy fund
CrossBoundary Energy announced the first close at $8 million for its first fund, CrossBoundary Energy Fund I, which, after leverage, aims to invest over $25 million in solar assets in the next 18 months. The fund, which has a hard cap of $10 million in equity, is a pilot fund targeting infrastructure level returns and is designed to demonstrate the potential of the asset class in Africa, acting as a pre-cursor to the raise of a larger fund. Investors included Blue Haven Initiative, TreeHouse Investments and Ceniarth as well as USAID, OPIC on behalf of Power Africa and the Shell Foundation.
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Policy, Regulation & Compliance...
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Private Equity
Policy and regulatory response to Private Equity in West Africa
An interesting perspective piece on what response Nigeria's legal and policy institutions should give to private equity's growing interest in the country to ensure that it can be leveraged by the government to achieve some of its strategic infrastructural, social and economic objectives.
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Strategies - Private Equity
MIC on the hunt for acquisitions
Mineworkers Investment Company, the 100% black-owned investment company set up by the Mineworkers Investment Trust in 2005, is on the lookout for a control deal in companies operating in the consumer sector. The company tells Business Insider that the company has the ability to make investments of R1 billion or almost $70 million by itself or in partnership with another black empowerment company.
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Strategies - Private Equity
EFG Hermes targets renewables opportunities
EFG Hermes is looking for investments in North Africa's renewable energy sector as countries in the region look to diversify their energy mix to help plug energy shortages. Egypt's energy ministry estimates that the country needs $70 billion in investment over the next 7 years to meet expected energy demand. The Egyptian investment bank is looking to build investment vehicles to take advantage of greenfield developments in Egypt and the rest of North Africa.
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This week's issue supported by...
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AfCD's 2016 Guide to sub-Saharan Private Equity
"The must-have reference and planning resource for investors and their advisers exploring the private equity investment opportunity in sub-Saharan Africa."
- Profiles with Names, Emails of each firm's investment professionals
- Details of active funds, preferred deal sizes, regional and sector preferences
- Information on current portfolio companies and projects
- Headquarter and Regional Office contact details
- Expert insight on fund raising, due diligence, execution and exits
- Quick reference indexes of fund managers and portfolio companies by sector
An interesting perspective piece on what response Nigeria's legal and policy institutions should give to private equity's growing interest in the country to ensure that it can be leveraged by the government to achieve some of its strategic infrastructural, social and economic objectives.
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Perspectives
Myths of Africa-China relationship dispelled
// ft.com
As China's trade with sub-Saharan Africa has grown from $10 billion some 15 years ago to $200 billion today, Aubrey Hruby, co-founder of the Africa Expert Network and co-author of the recently published
"The Next Africa" dispels five common myths about the China-Africa relationship that, in her words, are "unfortunately becoming assumptions even at the highest levels of policy-making."
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| Companies, People & Profiles... |
Company News
Actis, the pan-emerging market investor with $7.6 billion under management now has an office in New York, its first on North America, and third in the Americas after Sao Paulo and Mexico City. The new office will allow Actis to develop the breadth and depth of its relationships across the North and South American continents as firm enters its second decade of growth.
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People News
EBS Advisory, an environmental and sustainability consultancy, has appointed Paul Ben-Israel as a Managing Director to head up the company's operations in the SADC region. He started his career in the pensions actuarial department at Alexander Forbes, before transitioning to a career in management consulting, where he has spent the
better part of the last 20 years.Read more...
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Chief Strategy Officer at African Development Bank
Based in Abidjan, Côte d'Ivoire
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Vice President for Africa-focused Private Equity firm
Based in London, UK
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Associate, Healthcare Investments at QGIAM
Based in Port Louis, Mauritius
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Graduate Business Analyst at Helios Towers Africa
Based in London, UK
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Investment Director, MEA at Cambridge Associates
Based in London, UK
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Corporate Associate at Norton Rose Fulbright
Based in London, UK
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VP, Transaction Advisory Services at StratLink
Based in Nairobi, Kenya
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Regional Chapter Coordinator, West Africa at ANDE
Based in Accra, Ghana or Lagos, Nigeria
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Division Manager, Capital Markets at African Development Bank
Based in Abidjan, Côte d'Ivoire
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Corporate Finance Transactor at Bowden & Co.
Based in Johannesburg, South Africa
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Corporate Finance role at JSE-listed company
Based in Cape Town, South Africa
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Business Development at Nexus Capital Markets
Based in Johannesburg, South Africa
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Investing in African Mining Indaba
Cape Town, February 8th to February 11th, 2016
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Washington, DC, January 27th to January 29th, 2016
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Egypt Energy Investment Summit
Cairo, February 16th to February 18th, 2016
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SAVCA's Private Equity in Southern Africa
Stellenbosch, February 17th to February 18th, 2016
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Johannesburg, February 17th to February 19th, 2016
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We hope you found the digest to be a useful summary of the major happenings in Africa's private capital markets last week. We'd love it if you shared it with colleagues and business partners. They can sign up for free
here.
Best wishes for a productive week - if you have any tips, suggestions, questions or comments, please get in touch.
All the best,
- Allan
Allan Cunningham
Editor & Publisher
AfCD | Africa Capital Digest
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Africa Capital Digest is a product of Rowayton Press
Rowayton, CT 06853, USA
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