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.
Thank 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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Metier, the private equity fund manager, saw two of its funds make their first investment forays into East Africa last week. The first, a consumer deal, is a joint investment, with the South African fund manager teaming up with fellow private equity investor,
Amethis Finance, to take a significant minority stake in
Kenafric Industries, a major FMCG group in Kenya. The transaction is limited to Kenafric's confectionery and culinary business, with the Group's founding family, the Shah's continuing to operate the rest of the firm's business lines separately.
Metier's second east Africa deal was in the renewable energy sector where the firm led an investment of $19.4 million in debt and equity from a consortium of investors. The beneficiary is the Sindila Hydropower Project, a 5.25MW run of river development in Western Uganda. With an 87% stake, Lereko Metier Sustainable Capital is the largest shareholder in the consortium, which also counts KMRI USA, the project's original developer, WK Power, Fieldstone Africa Investment Resources and the United States development finance institution OPIC as part of its membership.
The biggest Africa-related deal of the week involved
Kinnevik AB, the Swedish investment management firm, and
Rocket Internet, the publicly listed internet investor which owns a stake in
Africa Internet Group, the parent of
Jumia. Kinnevik is selling half its stake in Rocket Internet via an accelerated book build, and the offer will earn the investment company approximately $220 million in gross proceeds. Kinnevik first backed Rocket Internet in 2010, since when, according to
Bloomberg's Gadfly column, the investment has generated an annualized internal rate of return of 91%.
In fundraising news, South African investment firm
Ethos has launched the capital raise for Ethos Mezzanine Partners 3, targeting $150 million at final close. The generalist fund, which will invest in mezzanine and quasi-equity growth, acquisition and replacement financing opportunities in companies in southern and sub-Saharan Africa, will look to make between two and five investments a year, ranging between $5 million to $30 million in size and return an IRR in the mid-teens. A first close is expected to be held around about the end of March or the beginning of April.
There were a couple of financial services sector deals announced last week, one insurance and the other, Fintech. In the first, Capitalworks announced that it is acquiring insurance giant Aon's shareholding in 10 employee benefit, insurance and reinsurance brokerage operations in several sub-Saharan African countries. Once established, the new entity will be Aon's largest exclusive global network correspondent on the continent.
In a fintech deal, Tala, a Los Angeles-headquartered mobile technology and data science company with operations in East Africa and Southeast Asia, has raised a $30 million Series B round from a consortium of investors led by one of Sand Hill Road's leading venture capital firms, IVP. The capital will be used by the firm to accelerate product development, expand into new markets build its team of associates. Tala's mobile app technology for Android aggregates more than 10,000 data points on a customer's mobile device and build's a customized credit score for that individual, before allowing the customer to apply quickly for credit and receive an instant decision and offer. The credit is then disbursed directly to the customer's mobile accounts who then repays their loans directly from the app.
South African private equity firm
Medu Capital has acquired a 15% stake in
Hero Telecoms for $5.75 million. The fresh equity capital will be used to fund the company's ongoing acquisition plans. Since being established in 2014 with the objective of consolidating the fragmented Wireless internet Service Provider (WISP) market, Stellenbosch-based HeroTel has acquired a total of 10 WISPs and is reportedly working an additional two potential acquisitions currently.
A debt deal from December 2016 rounds out Africa's transaction news for the week. It was announced last week that
Helios Credit Partners has agreed to provide
Trustco with a $40 million financing facility which will be used to capitalize the conglomerates's growth in Namibia's property sector. The deal brings the total amount of capital secured by Trustco over the prior six months to $77 million.
Reuters reports that
Bidcorp could tap as much as R1.2 billion for M&A deals in the future, quoting comments made by the company's CFO on a recent earnings call. The strategy could help some private company investors achieve exits, with Bidcorp's CEO Bernard Berson indicating that the most likely targets would he family-owned or private equity-backed food-service groups.
Finally,
Business Day reports that while global mining deal volume fell 9% year on year in 2016, Africa's mining industry bucked the M&A trend, growing by 62% to almost $6 billion in the same time frame. The findings are taken from
EY's latest quarterly report on mergers, acquisitions and capital raising in the mining and metals sector.
As always, you can review these and other stories by scrolling down and clicking through to them below.
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Kinnevik AB sells part of its stake in Rocket Internet, the investor behind Jumia
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Private Equity
Kinnevik earns $220mln from Rocket Internet stake sale
Kinnevik AB, the Swedish investment management firm, is selling 50% of its stake in Rocket Internet to several institutional investors via an accelerated bookbuild. The offering is priced at €19.25 per share, and if fully taken up, will earn Kinnevik €209 million (approximately $220 million) in gross proceeds.
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Private Equity
Amethis and Metier team up to buy Kenafric stake
Two Africa-focused private equity fund managers, Amethis Finance and Metier, are teaming up to take a significant minority stake in Kenafric Industries,
a major FMCG group based in Kenya. The transaction is limited to Kenafric's confectionery and culinary business, with the founding Shah family continuing to operate the Group's footwear and stationery businesses separately.
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Private Equity
Capitalworks buys AON's sub-Saharan businesses
Capitalworks,
an Africa-focused private equity firm managing more that $515 million in assets, is acquiring insurance giant Aon's shareholding in 10 employee benefit, insurance and reinsurance brokerage operations in several sub-Saharan African countries. Terms of the deal, which will become effective once all necessary regulatory approvals have been granted, were not disclosed.
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Private Equity
Metier-led consortium backs Sindila Power with $19.4mln
The Sindila Hydropower Project, a 5.
25MW
run of river development in Western Uganda, achieved financial close at the end of January, raising a total of $19.4 million in debt and equity from a consortium of investors led by Lereko Metier Sustainable Capital. Construction of the project, which is now
under way
, is expected to take 19 months
.
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Credit
Helios backs Trustco in $40mln debt deal
It was announced last week that Helios
Credit Partners
agreed to provide Trustco with a $40 million
financing
facility
in December last year
, bringing the total amount of capital secured by the Namibian conglomerate
over the prior six months to $77 million. No additional terms of the deal were disclosed.
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Private Equity
IVP leads $30mln Series B round for Tala
Tala, a Los Angeles-headquartered mobile technology and data science company with operations in East Africa and Southeast Asia, has raised a $30 million Series B round from a consortium of investors led by one of Sand Hill Road's leading venture capital firms, IVP. The capital will be used by the firm to accelerate product development, expand into new markets build its team of associates.
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Private Equity
Medu spends $5.75mln for 15% HeroTel stake
Medu Capital, the South African private equity firm, has acquired a 15% stake in Hero
Telecomms
for R74.25 million, (approximately $5.75
million at current rates), valuing the wireless internet service provider at R495 million or $38.4 million.
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This week's issue supported by...
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Mezzanine
Ethos targets $150mln for Mezzanine Partners 3
South African investment firm Ethos
has launched the capital raise for Ethos Mezzanine Partners 3, targeting $150 million at final close. The generalist fund will invest in mezzanine and quasi-equity growth, acquisition and replacement financing opportunities in
companies in southern and sub-S
aharan Africa.
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Portfolio Companies & Projects...
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Mining
AMED Funds subsidiary backs Andiamo with $500,000
Emerald Ex
, a fully-owned subsidiary of AMED Funds-backed NutureEx, is
investing
$500,000 for 5
million new shares in Andiamo Exploration
, a private British company exploring for gold and base metals in Eritrea.
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Trends
Africa's mining and metal deal volumes jump 62%
While global mining deal volume fell 9% year on year in 2016, Africa's mining industry bucked the M&A trend, growing by 62% to almost $6 billion in the same timeframe. The findings are taken from EY's latest quarterly report on mergers, acquisitions and capital raising in the mining and metals sector.
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Strategies
Private Equity assets a possible target for Bidcorp's M&A plans
According to comments made by Bidcorp's CFO during a recent earnings call, the South Africa company could put up to $1.2 billion towards acquisitions. CEO Bernard Berson indicated that the most likely targets would he family-owned or private equity-backed food-service groups.
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Companies, People & Profiles...
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People
Zemedeneh Negatu leaves EY for Fairfax Africa
After more than 15 years with EY in Ethiopia, Zemedeneh Negatu is parting ways with the global management consultancy to take up the reins as Global Chair investment vehicle Fairfax Africa.
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This week's issue supported by...
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BUILDING TOMORROW'S AFRICA TODAY:Financing Infrastructure in the World's Final Frontier Market
As part of its 10th anniversary celebrations, the Africa Finance Corporation (AFC), the continent's leading public-private sector infrastructure finance institution, is bringing together many of the top international players in this sector for high level discussions during AFC Live 2017, Africa's premier infrastructure summit.
The second edition of AFC Live also comes at a time of great global changes and shifting priorities. The time for fresh strategies is now. The event will provide an invaluable platform to public and private sector players to convene, interact, exchange inside knowledge, view opportunities, review recent success stories, study innovative solutions and chart the way forward.
If you are involved in any capacity in the African infrastructure space, you cannot afford to miss this unique opportunity.
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Reserve this position for your job ads...
AfCD counts the most active, dynamic and experienced Africa-focused investment professionals among its readers. Bolster your 2017 recruitment efforts by advertising your vacancies in this highlighted position to attract the very best applicants.
Email
Teresa Hall today to find out about rates and availability.
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Based in Johannesburg, South Africa
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Based in Cape Town, South Africa
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Based in Cape Town, South Africa
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Director, Macroeconomics Policy, Forecasting & Research at AfDB
// afdb.org
Based in Abidjan, Côte d'Ivoire
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Director, Office of the Senior Vice President
// afdb.org
Based in Abidjan, Côte d'Ivoire
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Washington, DC, March 9th to March 10th, 2017
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Pensions Funds & Alternative Investments Africa
Balaclava, Mauritius, March 15th to March 17th, 2017
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14th Annual AVCA Conference
Abidjan, April 4th to April 5th, 2017
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Bonds, Loans & Sukuk Africa
Cape Town, April 5th to April 6th, 2017
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Africa Financial Services Investment Conference 2017
London, May 3rd to May 5th, 2017
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Abuja, May 15th to May 16th, 2017
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19th Annual Africa Energy Forum
Copenhagen, June 7th to June 9th, 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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