November 24, 2014

The weekly roundup of Africa's Private Capital news

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This week, as with every week, we've sifted through a large amount of content from multiple sources to bring you the latest digest of the most noteworthy private equity, venture capital and infrastructure financing deals and investment news stories related to Africa from the 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...

In the biggest reported deal of the week, Ethos Private Equity has agreed to write a $144 million cheque to acquire diversified packaging company Nampak's Tissue, Corrugated and Sacks divisions in South Africa. According to Business Day the disposal of these "underperforming" assets makes strategic sense for the company and quotes an analyst as saying that Ethos seems to have picked up the divisions for a price that is 20% lower than the net asset value of the businesses.

Meanwhile, Kenya saw some healine-grabbing private equity activity last week with two deals. In the first, LeapFrog Investments has sealed an $18,7 million deal to acquire a majority stake in Resolution Insurance. The investment is being made from LeapFrog's second fund which closed at $400 million a couple of months ago. Kenya's non-life insurance market is growing at 20% a year, so the deal gives the fund exceptional exposure to this growth. In the second Kenyan deal of the week, Fusion Capital spent $2.2 million to bump up its stake in Xtra Publishing to 57.6%. The company published XNews, the free evening paper launched in March this year, now boasting a daily distribution of 30,000 print copies.

Abraaj Investment Management's bid to acquire a majority stake in Egyptian snack maker Bisco Misr seemed to have reached its conclusion last week when it announced it had received approval to acquire 100% of the company for $118 million. But by the week's end, reports started to emerge that US cereal maker Kellogg's had jumped into the fray, offering $127 million for the company. We'll have to see how things play out, but as we go to press, the Kellogg's bid is being scrutinized by the relevant authorities and Abraaj has not publicly reacted.

On the fundraising front, things were very quiet last week. Nigeria announced the launch of a $50 million venture capital fund to support the launch and expansion of small and medium enterprises in the country. Details on who will manage the fund have not, as yet, been revealed. On the debt front, meanwhile, reports are circulating that Kenya plans to raise an additional $750 million for development projects by expanding the sovereign bond issue it held in June.

And finally, perspective on the investment opportunities in Angola from Teodoro Poulson, a member of the investment committee of FACRA, the government-backed venture capital fund. He delivers great insight on the investing landscape in Angola, the opportunities he sees and the government's initiatives to boost investment in the country.

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

Ethos acquires Nampak paper divisions for $144mln // bdlive.co.za

Packaging company Nampak is selling most of its corrugated paper, sacks and tissue divisions in South Africa to Ethos Private Equity for R1.6 billion or $144 million. The deal is valued at some 20% less than the net asset value of the businesses which likely reflects the recent weak performance of the divisions. Ethos's investment is being made from its fourth fund, and Nampak will use the proceeds of the sale to finance the expansion of its remaining businesses throughout Africa.

Read more...

Private Equity

Abraaj completes $118mln acquisition of Bisco Misr // ventures-africa.com

Abraaj Investment Management, a subsidiary of The Abraaj Group, confirmed last week that it has received the necessary clearances to complete the 100% acquisition of Egyptian snack maker Bisco Misr. However, in a last-minute development at the end of last week, Ventures Africa reports that US cereal maker Kellogg's has made a last-ditch bid of $127 million for the company, a move popular with some Bisco Misr shareholders. The Kellogg's bid is subject to approval by the Egyptian Financial Supervisory Authority.