Yellowwoods sells GBK for £120mln, Actis buys AfricInvest's Medis stake, BBOXX raises $20mln

September 5th, 2016

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. Thank you for being a reader and we look forward to continuing to keep you informed on the private capital investment themes, deals and fundraisings in Africa.

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The Week in Brief...

An upmarket burger chain was the center of the largest private equity-related deal in Africa last week. Famous Brands, owner of the Wimpy chain in the UK, is adding to its portfolio of British assets by acquiring Gourmet Burger Kitchen from South African private equity investor Yellowwoods and the company's management in a £120 million (approximately $143 million) deal using a combination of cash and short term funding. Yellowwoods originally acquired the business from its founders in 2010. Additional terms of either deal were not disclosed.

Gourmet Burger Kitchen, which has delivered five consecutive years of same-store sales growth at better-than-market rates, is an opportunity for the restaurant franchisor to tap a more upmarket consumer via the multi-channel brand which earns its revenues selling eat-in and take-away food services, online delivery and GBK-branded food products in retail locations. According to Kevin Hedderwick, Famous Brands' Group Strategic Advisor for M&A, the company's existing business model has the potential to double the business's footprint over the next five years.

Staying with the food sector, Invenfin, Remgro's strategic venture capital and private equity investment arm, is taking a 30% stake in South Africa's Dynamic Commodities, a specialist producer and exporter of frozen fruit-based delicacies based in Coega outside Port Elizabeth, South Africa. Stuart Gast, Invenfin's Executive Director who led the transaction, will be taking a board seat as part of the deal. The decision to invest in the company was motivated by the quality of the owner-management team, the company's product range and operational capabilities as well as the growth potential of the global market for frozen desserts.

Last week also saw a couple of pharmaceutical deals - one in North Africa and the other south of the Sahara. Medis, a generic pharmaceuticals business operating in Tunisia and Algeria, was the subject of a secondary private equity stake sale. Actis has agreed to acquire what the press release announcing the deal describes as a "meaningful stake" in the business from fellow Africa-focused private equity investor AfricInvest in an undisclosed deal. Actis plans to establish Medis as a significant pan-African and Middle Eastern pharmaceuticals platform by injecting additional capital to finance its planned build-and-buy strategy.

In what is in all likelihood a smaller pharmaceutical deal, size-wise, Namibia's EOS Capital is acquiring a 35% in Fabupharm, a pharmaceutical manufacturer with regional expansion ambitions. The company operates the only pharmaceutical manufacturing plant in Namibia, producing a range of products including paracetamol, antibiotics, vitamin supplements and sunscreen and selling them to the Namibian government as well as local retailers and pharmacies. The firm has also secured export approval for a number of its products to be shipped to Botswana, Mozambique and Lesotho and a number of other countries.

One of the most interesting companies in Africa's renewable energy sector landed $20 million from a consortium of investors last week. Off-Grid solar company BBOXX will use the capital to support the its expansion plans in its existing markets of Kenya and Rwanda as well as accelerate the provision of products and services in other markets, including Cameroon, Côte d'Ivoire and Nigeria. The consortium was made up of ENGIE Rassembleurs d'Energies, MacKinnon, Bennett & Company (MKB), the recently-launched KawaSafi Ventures as well as existing investors Khosla Impact Fund, Bamboo Finance and DOEN Foundation.

In venture capital deals last week, a couple caught our eye - Safaricom's Spark Ventures is backing mSurvey, the Nairobi-headquartered mobile research platform in what is the $1 million fund's second and largest investment to date. mSurvey uses SMS and mobile messaging technology to simplify access to on-demand data from the emerging world. With this investment Spark joins mSurvey's roster of investors which include Silicon Valley-based Cross Culture Ventures and Caribbean-focused AlphaAngels. Meanwhile, Goodwell, Omidyar Network and Horizon Ventures have committed $1.5 million between them to South African transport technology startup Whereismytransport as part of the firm's anticipated $2.6 million seed round.

And a group of Egyptian and United Arab Emirates angel investors and venture capitalists are backing taxi-hailing startup Ousta with a $1.25 million bridge investment to support the Cairo-based company's recruitment and growth plans. Founder and Chairman Nader El-Batrawi tells Disrupt Africa that he expects the firm to be looking for another sizeable round in the near future.

There were some other interesting bits of deal-related news last week. According to Bloomberg, two potential suitors for some of Barclays Africa's assets are reportedly pulling back from investing in the company. South Africa's Public Investment Corporation was looking to gather a group of black shareholders to buy a stake in the company who are now struggling to raise financing. The Abraaj Group, which was preparing another bid, is losing interest, according to unnamed sources and have allowed an exclusivity agreement to lapse. Bloomberg reports that the pullbacks mean Barclays could sell down its stake via a share sale in May 2017.

Japan's pledge at the Tokyo International Conference on African Development held in Nairobi at the end of August to invest $30 billion in public and private capital on the continent over the next 3 years sends a strong signal of the country's renewed level of interest in Africa. China tends to take a dim view of this and other Japanese initiatives on the continent. An analysis and review by the Brookings Institute looks at the intensifying competition between the two countries in relation to Africa.

Finally this week, the Private Infrastructure Development Group is planning to establish an office in Nairobi, helping finance infrastructure projects across Africa. The multi-donor organization's CEO, Philippe Valahu, outlined the plans at a seminar held in Nairobi last week. InfraCo Africa, a specialist finance and project development subsidiary of the Group, will source investment opportunities and provide capital for early stage infrastructure projects.

As always, you can review these and other stories by scrolling down and clicking through to them below.

Famous Brands acquires Gourmet Burger Kitchen from Yellowwoods in $143 million transaction

Deal News...

Private Equity

Yellowwoods exits GBK in £120mln deal

// africacapitaldigest.com

In its largest transaction to date, South Africa's Famous Brands is acquiring Gourmet Burger Kitchen from private equity investor Yellowwoods and the company's management in a £120 million (approximately $143 million) deal using a combination of cash and, if required, short term funding. The company, which was launched in 2001, now operates 75 company-owned restaurants across the United Kingdom, and is acknowledged as a market leader in the premium burger category. Yellowwoods originally acquired the business in 2010.