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.
Thanks you being a reader and we look forward to continuing to keep you informed on the private capital investment themes, deals and fund raises in Africa.
As always, we'd be delighted if you shared it with any interested colleagues and/or business partners. If they would like to receive their own weekly copy in 2017, they're more than welcome to sign up here.
Finally, 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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We were reminded of possibilities of Africa's hospitality sector investment potential for private equity last week with the announcement of
Quantum Global Africa Investments Africa Management's acquisition of the
Mövenpick Ambassador Hotel in Accra from
Kingdom Holding Company for a total enterprise value of $100 million. The deal, which closed at the end of December, is the largest open market hotel transaction in sub-Saharan Africa to date.
It marks the second investment for QG Africa Hotel LP, Quantum's $500 million hospitality fund, which made its debut investment in March 2016, acquiring the
Lusaka InterContinental from Kingdom Holding in a $36 million deal. Located in Accra's central business district, the Mövenpick Ambassador Hotel is the largest 5-star property in Ghana, attracting both international travelers and affluent Ghanaians, all key criteria underpinning Quantum Global's investment decision. The hotel has a strong operational track record of growth, which positions it well to capitalize on the expected expansion in the hospitality market in Africa.
We move to North Africa for news of another significant private equity deal last week.
CDG Capital Private Equity has successfully exited regional outsourcing company
Intelcia is a sale to multinational
Altice Group, earning 4.6x money on its investment.
CDG originally backed Intelcia in 2010, when the firm posted revenues of approximately $20 million, Since them through a series of acquisitions, Intelcia has grown dramatically, delivering over $125 million in sales in 2016. Today Intelcia has operations in Morocco, France, Cameroon and Senegal, employing more than 7,000 employees, making it one of the largest French-speaking outsourcing companies.
In Benin, impact investor
The Moringa Partnership announced an equity investment in
Tolaro Global, a processor and exporter of cashew nuts. The capital will be used to help Tolaro expand its development of sustainable and ethical cashew production. The company aims to increase its cashew processing capacity to 20,000 tonnes by 2021, a significant leap from the 2,500 tonnes processed in 2016. In addition, Tolaro is looking to set up a salting and roasting unit, thereby becoming the first company in West Africa to export 100% "Made in Africa" cashew end products.
A couple of items regarding private equity-backed portfolio companies also caught our eye last week. In the first,
Jumo World, which counts
LeapFrog Investments, Vostok and
Gemcorp among its backers, is selling its entire stake in
afb Ghana, one of the country's largest consumer and micro lending institutions, to
DPI-backed
Letshego Holdings in an undisclosed deal.
And secondly, the
IFC is mulling a €20 million loan to
Bounty Brands, the consumer goods platform owned by South African private equity investment holding company
Coast2Coast. The debt will be used to support the company's acquisition plans and regional expansion activities over the next few years in preparation for an eventual IPO.
According to the Summary of Investment Information published on the IFC's website, Bounty Brands is looking to acquire food personal and homecare manufacturers in Central and Eastern Europe as well as in South Africa. The plans are a continuation of a strategy that has seen Bounty snap up a number of consumer goods assets in the past couple of years.
There were no fund raise launches or closes last week, but there was news of two new investment firm launches.
Reuters reports that Marlon Chigwende and Kayode Akinola, both Africa heads of leading global private equity firms, (
Carlyle and
KKR respectively), are teaming up to launch
Arkana Partners to invest in mid-cap investment opportunities on the continent. The new firm will look for businesses which have the capacity to absorb $100 million in capital, with its main focus will being on those companies looking for between $20 million to $60 million of fresh equity.
Lateral Capital, a new private investment firm focused on opportunities in early-stage and growth ventures in sub-Saharan Africa, has been formed via the merger of U.S.-based investment firm
Emergo Partners and
Frontier Dawn Partners, a U.K. holding company. The new investment vehicle, which is structured as a pledge fund, will make investments across the capital table, and allow investors to participate in direct private investments at the asset level.
I
n Policy and Regulation news, CDC, the UK's development finance institution, has published a review of the CDC bill which was due to have its third reading in the UK Parliament last week. The review highlights the aims and achievements of the group to date in support of the bill which proposes to increase the amount of capital managed by the DFI.
And finally, Europe's geographical, historical, cultural and ethnical proximity to Africa means it should be playing more of a leading role in as an underwriter and supplier of infrastructure finance and services to the continent.
Citigroup's Miguel Azevedo argues in the
Financial Times for the creation of an African Infrastructure Investment Bank to help reignite the presence, influence and partnership of Europe in Africa.
As always, you can review these and other stories by scrolling down and clicking through to them below.
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The Moringa Partnership backs Benin cashew processor Tolaro Group in undisclosed deal
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Private Equity
Quantum buys Mövenpick Ambassador in $100mln deal
Quantum Global Africa Investments Africa Management , the private equity investment firm based in Mauritius, has acquired the Mövenpick Ambassador Hotel in Accra from Kingdom Holding Company for a total enterprise value of $100 million. The deal, which closed at the end of December, is the largest open market hotel transaction in sub-Saharan Africa to date.
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Private Equity
CDG Capital Private Equity sells Intelcia
CDG Capital Private Equity has successfully exited regional outsourcing
company
Intelcia
is a sale to multinational Altice Group, earning 4.
6x money on its investment. Additional terms of the deal were not disclosed.
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Private Equity
Moringa makes investment in cashew processor Tolaro
Last week, the Moringa Partnership announced an equity investment in Tolaro Global, a processor and exporter of cashew nuts located in Benin. The investment is being made through Moringa SICAR SCA, the impact investment firm's €84 million investment vehicle. Terms of the deal were not disclosed.
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Fund & Fundraising News...
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Private Equity
Arkana Partners set up by Chigwende and Akinola
Marlon Chigwende and Kayode Akinola, both Africa heads of leading global private equity firms, are teaming up to launch Arkana Partners to invest in mid-cap investment opportunities on the continent. The new firm will look for opportunities up to $100 million in size, and, while most of the emphasis will be on private equity transactions, the firm will also review deals in other asset classes.
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Private Equity
Lateral Capital formed to target early-stage ventures
Lateral Capital, a new private investment firm focused on opportunities in early-stage and growth ventures in sub-Saharan Africa, has been formed via the merger of U.S.-based investment firm Emergo Partners and Frontier Dawn Partners, a U.K. holding company. Between them, the firms held six African portfolio companies which will now be managed by Lateral Capital.
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Projects & Portfolio Companies...
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IFC mulls €20 mln loan to Bounty's M&A war chest
The IFC is mulling a €20 million loan to Bounty Brands, the consumer goods platform owned by South African private equity investment holding company
Co
ast2Coast.
Th
e
debt will be used to support the company's acquisition plans and regional expansion activities over the next few years in preparation for an eventual IPO.
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Jumo World exits afb Ghana
Jumo World, which counts LeapFrog Investments, Vostok and Gemcorp among its backers, is selling its stake in afb Ghana, one of the country's largest consumer and micro lending institutions, to DPI-backed Letshego Holdings in an undisclosed deal. Verdant Capital won a competitive mandate to manage the sale.
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This week's issue supported by...
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Policy, Regulation & Compliance...
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Regulation
Competition law in Africa increasingly active and complex
As the number of competition regimes and their interactions in Africa increase, competition law on the continent is becoming increasingly active and complex. A look at developments over the last 12 months.
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Policy
CDC reviews impact in preparation for parliamentary bill reading
CDC, the UK's development finance institution, has published a review of the CDC bill which was due to have its third reading in the UK Parliament last week. The review highlights the aims and achievements of the group to date in support of the bill which proposes to increase the amount of capital managed by the DFI.
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Perspectives
The case for a European-led Africa Infrastructure Investment Bank
Europe's geographical, historical, cultural and ethnical proximity to Africa means it should be playing more of a leading role in as an underwriter and supplier of infrastructure finance and services to the continent. Citigroup's Miguel Azevedo argues for the creation of an African Infrastructure Investment Bank to help reignite the presence, influence and partnership of Europe in Africa.
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Perspectives
Sukuk issuance points to Islamic Finance's growing momentum
With recent Shariah-compliant sovereign sukuk issuances in Togo and Cote d'Ivoire indicate momentum of Islamic finance in Africa is gathering pace. Shakeel Adli of law firm CMS Cameron McKenna reviews progress.
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Perspectives
Mobilizing private capital for sustainable development
As the gap between actual and required spending on infrastructure assets in Africa and other emerging markets widens, a look at how the IFC's Asset Management Company aims to mobilize private capital for sustainable development.
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Sponsor Content
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Based in Brussels, Belgium
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Based in Dubai, United Arab Emirates
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Pensions Funds & Alternative Investments Africa
Balaclava, Mauritius, March 15th to March 17th, 2017
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Regional Energy Co-operation Summit
Abidjan, January 25th to January 27th, 2017
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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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Copyright © 2016 Rowayton Press, LLC. All Rights Reserved.
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