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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Private Equity fundraising in Africa saw a couple of first-time funds holding closes last week. While neither was particularly huge, here is another sign that the private equity asset class is attracting interest on the continent.
Of the two,
Enko Capital's second and final close for their debut private equity fund was the larger at $83.25 million.
Enko Africa Private Equity Fund's strategy is to make growth capital deals in late-stage private companies that have the potential to be listing candidates within 4 to 5 years of an investment. The fund held its first close at $48.25 million in April 2014 with commitments from the
African Development Bank and
Soros Investment Brothers.
PROPARCO, the French DFI, is joining them at the second close along with a group of European family office and high net worth investors.
Meanwhile,
Ashburton Investments, the South African asset manager, also announced that a final close had been held at the end of January for their first private equity fund. The R500 million (or approximately $31 million) fund of funds
will pursue a combined strategy of direct private equity co-investments alongside private equity firms, the acquisition of secondary interests from existing funds and could make commitments to new private equity funds in both South African and the rest of the continent. The amount earmarked for direct investments is capped at 50% or R250 million of the fund.
In deal news, Amethis Finance announced it had made a follow-on investment in Pétro Ivoire, a distributor of oil and gas products in Côte d'Ivoire. Amethis had originally invested in the firm in 2013, when it acquired a 39% stake. This time around the deal was structured as a debt/equity deal, with 66% of the capital being provided as equity and the balance in the form of convertible loans.
Synergy Capital has made the fifth investment from its $100+ million private equity fund which closed in September last year with a with an investment in Africa Terminals, a Terminal and Storage company offering services to local and international petroleum products companies across West Africa. Once again, terms of the deal were not disclosed.
The capital will be used to acquire additional terminal and storage facilities in countries along the West African coast, including Nigeria, Ghana, Liberia and Senegal, a region which is experiencing acute shortages in storage capacity and which is expected to get worse as the impact of industry is deregulation is felt across the region.
At the smaller end if the scale, Amadeus Capital Partners, the UK-based technology investor made its second deal in Africa in a month with a $2 million investment in
Hepstar, the Cape Town-headquartered digital insurance distributor which was founded in 2013. And Norwegian DFI,
Norfund is backing East African logistics company
Freight-in-Time with $10 million in exchange for a significant minority stake. Norfund will be taking a board seat as part of the deal, but nut no additional transaction terms were disclosed.
To finish off with this week, some interesting trend data. M&A information provider,
Mergermarket published its Deal Drivers Africa report last week, revealing that with 290 deals for 2015, African M&A volume inched up by 1% in 2014, the highest since 2007. However, a combination of currency woes and fewer big ticket deals pushed overall deal value down by 26% to $23.3 billion for the year.
There were only 5 deals worth more than $500 million in 2015, compared with 14 for the prior year. The mid-market was responsible for volume growth with 88% of transactions on the continent being values at $250 million or less.
To read more on these and other stories from the last week, please scroll down for the abstracts and links.
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Amethis Finance boosts its stake in Pétro Ivoire in follow-on deal
Image Credit: Pétro Ivoire
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Private Equity
Amethis Finance in follow-on deal for Pétro Ivoire
Amethis Finance has announced that it, together with fellow stakeholders West Africa Emerging Markets Growth Fund or WAEMGF and the founding Kadio-Morokro family, have completed a follow-on deal in Pétro Ivoire, a large distributor of oil and gas products in Côte d'Ivoire. The transaction has been structured as a mix of equity and debt, with two thirds of the capital being provided as equity with the balance as convertible debt. As part of the deal, both Amethis Finance and WAEMGF will get additional seats on the company's board. Additional terms of the transaction were not disclosed.
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Private Equity
Synergy Capital backs Africa Terminals in latest deal
Synergy Capital has made the fifth deal for its $100+ million private equity fund with an investment in Africa Terminals, a Terminal and Storage company offering services to local and international petroleum products companies across West Africa. Terms of the deal were not disclosed.
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Private Equity
Qalaa set to sell Tanmeyah stake in $40mln deal
Investment company Qalaa Holdings, the former Citadel Capital, has agreed to sell its 70% stake in Tanmeyah Microenterprise Services to Egyptian investment bank, EFG Hermes. The deal, which is subject to regulatory approval and customary terms and conditions, values the private sector microfinance solutions provider at EGP 450 million or approximately $57.5 million.
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Private Equity
Norfund backs Freight-in-Time with $10mln
Norfund, the Norwegian Government's development finance institution, is backing Freight-in-Time, an East African logistics company with $10 million in equity for a significant minority stake. As part of the deal, Norfund will take a seat on the company's board. No additional details of the transaction were disclosed.
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Private Equity
Amadeus Capital backs Hepstar with $2mln
In its second deal in Africa in a month, Amadeus Capital Partners is backing Hepstar, the Cape Town-headquartered digital insurance distributor, with $2 million through the UK technology investor's Amadeus IV Digital Prosperity Fund. Additional terms of the transaction were not disclosed.
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Private Equity
Goodwell backs Musoni in undisclosed deal
Dutch impact investment firm has completed a deal to acquire a significant minority stake in Musoni Services, a cloud-based banking software provider for microfinance institutions or MFIs. The amount invested, stake size and valuation terms remain undisclosed.
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Funds & Fundraising News...
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Enko Capital hits $83.5mln with final close of debut fund
Enko Capital Management has held a second and final close for Enko Africa Private Equity Fund at $83.25 million, garnering commitments from PROPARCO, the French government's development finance institution through its investment arm FISEA, and a mix of European family offices and high net worth investors managed by Massena Partners.
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Ashburton holds final close for first fund at R500mln
At the end of January, Ashburton Investments, the South African investment manager, held a final close for Ashburton Private Equity Fund I (APEFI)at R500 million or approximately $31 million. The Fund, which according to the firm's website operates as a fund of funds, was established in mid-2014.
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Sovereign Debt
South Africa to tap bond market for $5.4bln
In South Africa's budget review last week, the Government revealed that it is planning to tap the global bond markets for up to $4.5 billion over the next three financial years, $1 billion of which could be issues before the end of March, if conditions allow. Servicing the debt would make the line item the country's fastest growing expenditure item which is estimated to rise by R15.3 billion over the next two years.
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This week's issue supported by...
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Projects & Portfolio Companies...
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Weak economy to impact South Africa's private equity exits
While some see an active year for private equity exits ahead for South Africa as pre-financial crisis assets have regained their equilibrium and holding periods expire, the country's faltering economy and falling currency will put the brakes on some of the more marginal planned exits on hold. For those that do come to market, the risk of compromised returns is significant following an almost 8% decline in South Africa's main equities benchmark over the last 12 months.
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Agriculture
Approaching agriculture as an investment opportunity
An op-ed piece by Nigeria's former Minister of Agriculture and African Development Bank's new President Akinwumi Adesina on the need to leverage the continent's existing agriculture assets to catalyze economic transformation rather than impose a clean "development "slate from which to start. Agriculture is a business and should be treated as such as a way to create wealth, improve people's live and thereby promote development.
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Trends
Africa's M&A volume inches up in 2015, but value shrinks
At 290 deals for 2015, African M&A volume was up 1% in 2014, the highest since 2007 while a combination of currency woes and fewer big ticket deals pushed overall deal value down by 26% to $23.3 billion for 2015. These are the top line findings from
Mergermarket's latest
Deal Drivers Africa Report which was published last week. There were only 5 deals worth more than $500 million in 2015, compared with 14 for the prior year. The mid-market was responsible for volume growth with 88% of transactions on the continent being values at $250 million or less.
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Perspectives
Tough economic climate enhances investment opportunity
The economic headwinds and low asset valuations facing companies across Africa across Africa, represent a significant opportunity for long-term investors to pick up some bargains. The fundamentals of Africa's growth story have not changed, but with China's slowdown, the slump in commodity prices and falling regional currencies dampening economic activity, investor's risk appetite for the continent's assets should be and is rising.
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Complimentary Webcast
Power Africa; Frameworks, Opportunities, Outlook
March 31st, 2016
4pm Johannesburg time
With the passage of the
Electrify Africa Act by the U.S. House of Representatives in mid February, a crucial underpinning for President Obama's Power Africa initiative is now in place.
Join
Africa Capital Digest for a complimentary webcast discussion on the framework of the initiative and the opportunities and outlook for investors and companies looking to participate in the promotion of first time access to electricity for people in sub-saharan Africa.
To register your place, please
click here
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Companies, People & Profiles...
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People
Jako van der Walt returning to Morgan Stanley
In a shuffling of the seats at Morgan Stanley, Jako van der Walt is returning to head the American bank's South African investment banking business, rejoining the firm he left 10 years ago, according to Bloomberg. At the same time, Managing Director Risana Zitha, formerly the head of investment banking coverage in South Africa, is relocating to London to head up Sub-Saharan investment banking coverage outside South Africa. Most recently van der Walt was head of metals and mining banking for sub-Saharan Africa at J.P. Morgan. He will be based in Johannesburg.
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Profile
Kleoss has goal of being multi-class investment manager
A profile of Kleoss Capital, fund manager of a R1.2 billion growth equity fund which launched in 2014, which has ambitions to grow into a multi-class alternative investment manager. In an interview with Hale Matsipa, the firm's Co-Founder and CEO, the article reviews the firm's strategy, its investment criteria and philosophy.
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Advertisement feature
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Africa Energy Forum 2016
21-24 June, London, UK
The 18th Annual Africa Energy Forum (AEF) will take place from 21-24 June in London at The O2 Continental hotel.
AEF has established itself as the international marketplace where governments and power utilities of Africa unite with the energy industry to focus on delivering power infrastructure projects across Africa. All the players in the industry are in the same place at the same time.
Over 1800 industry stakeholders are expected to attend in June 2016 including; government representatives, utilities, financial investors, power technology providers, power developers, EPC contractors and more.
With massive demand for power in Africa and international investors keen to fund power projects, this is the most established African power event that African governments and private sector attend year on year. To be added to the mailing list for this meeting, please email
[email protected]
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Principal/Chief Investment Officer, Global Power at IFC
Based in Washington, DC, USA
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Associate for South African Private Equity firm
Based in Johannesburg, South Africa
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Private Equity Compliance and Governance Officer
Based in Port Louis, Mauritius
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VP, Business Development for Silvertree Capital startup
Based in Cape Town, South Africa
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Associate for Africa-focused Private Equity firm
Based in London, United Kingdom
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Corporate Finance Partner for Law firm's Africa practice
Based in London, United Kingdom
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Law Associate, M&A and Private Equity, Africa & Emerging Markets
Based in London, United Kingdom
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Investment Associate at Enko Capital
Based in Johannesburg, South Africa
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Investment Associate, Africa Funds at CDC
Based in London, United Kingdom
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Investment Analyst at Enko Capital
Based in Johannesburg, South Africa
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Senior Investment Officer, Agriculture Fund at ARM
Based in Lagos, Nigeria
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Associate, Private Equity & Advisory for Private Equity firm
Based in Johannesburg, South Africa
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Senior Manager, TAS, Project Finance & Infrastructure at EY
Based in Johannesburg, South Africa
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Associate in Office of the Chief Investment Officer at CDC
Based in London, United Kingdom
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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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Africa Capital Digest is a product of Rowayton Press
Rowayton, CT 06853, USA
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