The
weekly roundup of Africa's Private Capital news
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Here's the latest weekly wrap of the most interesting Africa-related private equity, infrastructure and venture capital deal stories, market opinion articles and information pieces.
Thanks you being a reader and we look forward to continuing to keep you informed on the private capital investment themes, deals and fundraisings in Africa.
We'd be delighted if you shared it with any interested colleagues and/or partners. If they would like to receive their own weekly copy, they're more than welcome to sign up here.
As always, if you have any tips, suggestions or questions, please reach out to Allan Cunningham at
[email protected]
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This week's issue supported by...
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The pace of private equity deal making in Africa picked up noticeably last week compared to prior weeks this year. South African fund manager, Ethos Private Equity scored both an acquisition and an exit to garner a lot of coverage, but we also saw deals involving Broadreach Private Equity, LeapFrog Investments, PCM Capital Partners, Kinnevik AB and Schulze Global. And let's not forget Verod Capital Management's news, holding the final close for its second fund at $115 million, handily beating its original target for the fund by 15%.
For its acquisition last week,
Ethos announced that it has acquired a 65% stake in
Eazi Group, a South African equipment sales and rental business in a $97 million transaction. The stake was acquired from the firm's founding management and Buffet Investments, an investment vehicle controlled by billionaire Jonathan Beare, both of whom are re-investing into the new structure alongside Ethos and hold the balance of the ownership.
In its second deal of the week, Ethos announced the completion of the sale of its stake in
CQS Technology Holdings to JSE-listed
Adapt IT who agreed to pay sellers R217 million (or $13 million at today's exchange rates) in a cash and share deal when the deal was first announced in October last year. The disposal gives Ethos a full exit from its investment, which it originally made in 2008.
Meanwhile, mobile entertainment group
iROKO TV announced it has secured capital and content from existing investor
Kinnevik AB and French media giant
CANAL+ in a $19 million deal. The capital will be used to finance the development of local content as well as build its product and engineering teams in Lagos and New York and help the company achieve its goal of producing at least 300 hours of original content in 2016 and double that by 2018.
PCM Capital Partners is making an undisclosed investment in
First Atlantic Bank Ghana. The investment, which is being structured as a combined private placement and rights issue gives AA Global Investments, the SPV through which the investment is being made, a 15% share in the Ghanaian bank as well as a board seat.
In another financial services deal,
LeapFrog Investments is making its third direct investment in Ghana by acquiring a majority stake in
UT Life Insurance for an undisclosed sum. With insurance penetration rates of less than 2% in the country, the market offers the company significant expansion opportunities.
And
Schulze Global announced the completion of its acquisition of a 45% stake in Ethiopia's
MB PLC, a dairy processor in Ethiopia which operates under the Family Milk brand. The firm, which was founded in 2001, produces and distributes milk and milk products to a number of customers in Addis Ababa.
In fundraising news,
Verod Capital has held the final close for its second private equity fund at $115 million, exceeding its original target of $100 million. The fund has already started to make investments, committing more that $28 million in five transactions to date and will continue to target opportunities in a number of rapidly growing sectors including light manufacturing, consumer goods and services, business services, agriculture, education and financial services.
Speculation is mounting that Helios-backed
Interswitch will soon lay claim to being Africa's first public startup unicorn when it lists on the London Stock Exchange in 2016. Sources tell
Techcrunch that the digital payments company plans to go public sometime after Q2 with a $1 billion valuation, roughly two times revenues.
And finally,
Cargill's spin off of subsidiary
Black River Asset Management's private equity business has now been completed. The new private equity fund manager,
Proterra Investment Partners announced its launch last week as a stand-alone, natural resources-focused investment advisor and private equity fund manager with $2.1 billion under management, now owned by the former employees of the Black River private equity business. Cargill remains as an investor in the funds.
To read more on these and other stories from the last week, please scroll down for the abstracts and links.
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iROKO TV Co-Founder and CEO, Jason Njoku, who landed $19 million in "multiple deals" last week
Image Credit: iROKO TV
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Private Equity
Ethos spends $97mln for controlling stake in Eazi
Ethos Private Equity is acquiring 65% of Eazi Group, a South African equipment sales and rental business in a $97 million transaction. The private equity investor is acquiring the stake from the firm's founding management and Buffet Investments, an investment vehicle controlled by billionaire Jonathan Beare, both of whom are re-investing into the new structure alongside Ethos to hold the balance of the ownership.
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Private Equity
Kinnevik AB and CANAL+ back iROKO TV with $19mln
Citing "multiple deals totaling $19 million", mobile entertainment group iROKO TV has secured capital and content from existing investor Kinnevik AB and French media giant CANAL+ to help the Nigeria-based company scale its operations and expand its services across Africa. As part of the deal, Jacques de Puy, President of CANAL+ Overseas joins the iROKO board. Additional terms and details of the deals were not disclosed.
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Private Equity
Broadreach Private Equity acquires FS-Systems stake
Broadreach Private Equity, a specialist mid-market growth capital investor in South Africa, is acquiring a stake in FS-Systems, a security solutions provider, in partnership with Grindrod Financial Services. Terms of the deal were not disclosed. The private equity investor sees significant expansion potential for the company, particularly in the fields of advanced video surveillance and workforce management which have forecast annual market growth rates in excess of 20%.
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Private Equity
Ethos exits CQS to Adapt IT in R217mln deal
In the second deal in a week, South Africa's Ethos Private Equity announced the completion of the sale of its stake in CQS Technology Holdings to JSE-listed Adapt IT. Ethos originally invested in the niche technology company though its first fund in 2008 in a transaction that facilitated the introduction of empowerment partner Kapela Investments. Kapela and CQS Management become shareholders in Adapt IT.
Adapt IT agreed to pay sellers R217 million (or $13 million at today's exchange rates) in a cash and share deal when the deal was first announced in October last year.
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Private Equity
LeapFrog takes majority stake in UT Life
LeapFrog Investments, the specialist emerging markets private equity investor, is making its third direct investment in Ghana by acquiring a majority stake in UT Life Insurance in an undisclosed deal. The stake is being acquired from UT Holdings, a diversified holding company, who originally acquired the life insurance company in 2010. UT Holdings will remain a shareholder in UT Life and serve as a strong local counterparty to support the business on the ground.
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Private Equity
PCM Capital backs First Bank of Ghana
PCM Capital's West Africa Emerging Markets Growth Fund, a €38.5 million regional private equity fund, is making an undisclosed investment in First Atlantic Bank Ghana. The investment, which is being structured as a combined private placement and rights issue gives AA Global Investments, the SPV through which the investment is being made, a 15% share in the Ghanaian bank as well as a board seat.
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Private Equity
Schulze Global acquires 45% stake in Ethiopian dairy
Schulze Global Investments has completed its acquisition of a 45% stake in Ethiopia's MB PLC in an undisclosed deal. The Ethiopian dairy processor which operates under the Family Milk brand, was founded in 2001 and produces and distributes milk and milk products to a number of customers in Addis Ababa including hotels, retail outlets, restaurants and cafes as well as Ethiopian Airlines and a number of government agencies.
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Funds & Fundraising News...
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Verod beats target with $115mln final close
Nigerian investment firm Verod Capital has held the final close for its second private equity fund at $115 million, exceeding its original target of $100 million. The capital was raised from a diverse mix of global investors made up of a mix of asset managers, fund-of-funds, sovereign wealth funds, pension funds, family offices and development finance institutions. Verod Capital Growth Fund II will target opportunities in a number of rapidly growing sectors including light manufacturing, consumer goods and services, business services, agriculture, education and financial services.
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Projects & Portfolio Companies...
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Interswitch potentially Africa's first $1bln IPO
Sources confirm that Interswitch, the Nigerian digital payments company backed by Helios, is likely to list on the London Stock Exchange in 2016. With a potential valuation of more than $1 billion, the IPO would create Africa's first public startup "unicorn", encouraging more venture capital investors to explore tech opportunities on the continent.
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Policy, Regulation & Compliance...
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Policy
Electrify Africa Act to be voted by U.S. House next week
As the U.S. House of Representatives gets ready to vote on the Electrify Africa Act in the coming week, a call from Tony Elumelu and Aliko Dangote for the legislation to be passed without delay. If passed, it will be the most significant legislation to advance U.S. commercial relations with the African continents since the passage of AGOA some 15 years ago.
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Compliance
Compliance increasingly important in M&A transactions
Law firm clients are increasingly pushing for greater compliance in M&A transactions, even at the earliest stages of a potential deal. A look at the trend and how it is impacting transactions in African jurisdictions.
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Sectors - Mining
Private Capital eyes mining opportunities in South Africa
Some high quality mining assets are coming on to the market which private equity groups have in the past, lacked the sophistication to take advantage of. That looks like it's changing. A review of South Africa's mining sector and opportunities it offers the braver and loner-term oriented private capital investor.
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Sectors - Mobile
Investors look to tap Africa's mobile wave
// ft.com
Venture Capital investors are backing Africa-focused startups with hundreds of millions of dollars as they look to tap into a second -wave of technological advances building on the rapid spread of mobile phones across the continent.
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Sectors - Telecoms
Top opportunities for Telecoms in Africa
Despite rapid growth over the last few years, the telecoms sector is only just now on the cusp of achieving its great potential. A look at the key trends and countries in which promise investors the most opportunity.
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Perspectives
Tech startups a bright spot in South Africa
As South Africa's economy languishes, a silver lining in the clouds seems to be appearing. The country's startup sector could yet inject some life back into the moribund economy. A look at venture capital activity in South Africa and how both the quantity and quality of startups seems to be on the rise.
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| Companies, People & Profiles... |
Company News
Cargill spin-off begins life as Proterra
Cargill's spin off of subsidiary Black River Asset Management's private equity business has now been completed. The new private equity fund manager, Proterra Investment Partners announced its launch last week as a stand-alone, natural resources-focused investment advisor and private equity fund manager owned by the former employees of the Black River private equity business. Cargill remains as an investor in the funds.
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Chief Investment Officer at Audaces Impact
Based in London, UK
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COO for entrepreneurial Investment Bank
Based in Lagos, Nigeria
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Principal for Africa-focused Private Equity firm
Based in London, UK
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Analyst at Emerging Markets Private Equity firm
Based in London, UK
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Director, African Investments at LeapFrog Investments
Based in Johannesburg, South Africa
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Senior Associates/Associates for Quantum Investments
Based in Port Louis, Mauritius
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Director of Origination at Weiji Capital
Based in Cape Town, South Africa
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Senior Private Equity Dealmaker at Investment Bank
Based in Johannesburg, South Africa
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Senior Private Equity Manager at fund
Based in Johannesburg, South Africa
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Associate for South African Private Equity firm
Based in Johannesburg, South Africa
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Investment Manager, Timber & Forestry at QG Investments
Based in Port Louis, Mauritius
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Investing in African Mining Indaba
February 8th to February 11th, 2016
Cape Town, South Africa
Investing in African Mining Indaba™
is the world's premier mining investment conference,
dedicated to the capitalisation and development of mining interests in Africa.
It will take place on 8-11 February in Cape Town. Upgrades to the 2016 event include extended conference and exhibition hours, an enhanced investor programme, remodelling of the conference agenda, a new approach to the corporate mining presentations, and more specialised networking opportunities to an already robust deal-making platform.
A must attend event for
investors, mining executives, government ministers, and other mining professionals
with an interest in African mining. To learn more visit
www.MiningIndaba.com
or send an enquiry to
[email protected]
.
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US-Africa Business Summit 2016
Addis Ababa, February 1st to February 4th, 2016
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Investing in African Mining Indaba
Cape Town, February 8th to February 11th, 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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Africa's Investment Prospects - The 2016 Annual Debate
London, April 20th, 2016
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13th Annual AVCA Conference
Addis Ababa, April 25th to April 27th, 2016
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Southern Africa Energy & Infrastructure Summit
Maputo, May 4th to May 6th, 2016
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Africa Financial Services Investment Conference 2016
London, May 5th to May 6th, 2016
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18th Annual Africa Energy Forum
London, June 21st to June 24th, 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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