May 9th, 2016
The  weekly roundup of Africa's Private Capital news


 

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.

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 acunningham@africacapitaldigest.com
This week's issue supported by...             
Africa Energy Forum 2016
The Week in brief...
Deal sizes, if not volumes, definitely perked up in Africa's private equity market last week. The biggest transaction came courtesy of the UK's development finance institution, CDC, who announced an investment of $140 million in ARM Cement, East Africa's second largest cement producer and the purveyor of the regions Rhino Cement product. As part of the deal, Ketso Gordhan, CDC's Africa Head will take a seat on the ARM board.

The fresh capital is being earmarked to expand the company's production capacity to boost the supply of cement in the region, promote infrastructure development in its countries of operation as well as support ARM's potential expansion to other, neighboring countries.

The other major piece of private equity news last week concerned an IPO exit--a first for the Tunis Stock Exchange this year--as The Abraaj Group sold its remaining stake in Unimed, a pharmaceutical company in which it first invested in 2011. The offer was heavily oversubscribed, and values the company at approximately $150 million. Abraaj had already sold a significant part of its stake to a consortium of investors in December last year.

In another pharmaceutical deal last week, Adenia Partners took a stake in Opham, a pharmaceutical product wholesaler based in Madagascar in the latest deal for its €96 million Fund III. Once again, terms of the deal were not disclosed. The capital will be used to expand Opham's operations, which currently distributes more that 4,500 specialty and generic products to pharmacies and hospitals in Madagascar, and improve access to affordable, high-quality pharmaceutical products for the country's consumers.

Crossing over to the Western side of the continent, Quantum Global is leasing over 80,000 hectares from Angola's government to develop large-scale wood fiber plantations in the country's Planalto region. As part of the 60-year concession, Quantum aims to invest $50 million over the next 5 years in establishing new plantations, infrastructure and wood processing industries. The Planalto region has large areas of fertile land that are currently underutilized, low population pressure and limited natural forests. These factors, combined with sufficient water resources and access to transport infrastructure are suitable for the development of large-scale wood fiber plantations.

The buzz around the disposal of Barclays' Africa operations grew louder last week with the news that  Public Investment Corporation, South Africa's state-owned investment manager, is spending an estimated $87 million to acquire 10% of the shares offered in Barclays' accelerated book build to dispose a block of its holding in the subsidiary. At the same time, without naming names, South Africa's Reserve Bank has signaled its wariness to potential private equity deals for the country's banks in comments made to reporters by the institution's Deputy Governor last week. Some put this down to a shot across the bows of the potential bid from a consortium that includes Atlas Mara and the Carlyle Group, but earlier reports indicated that that group was more interested in deals for Barclays assets ex South Africa.

In fund news, Sarona Asset Management announced that it has completed its allocation to the portfolio of primary funds for Sarona Frontier Markets Fund 2, the $150 million private equity fund-of funds that closed in December 2014. The fund's portfolio, which now includes thirteen primary funds, three secondary funds and one co-investment will look to deploy its remaining secondary and co-investment allocation over the next 12 to 18 months. At the same time, the frontier and emerging markets fund-of-funds investor is actively raising its new fund, a planned $300 million vehicle which will build on Fund II's strategy of investing in high-performance primary and secondary private equity funds which invest in small and mid-cap growth companies in Africa, Asia and Latin America.

In what would be the first ever crowdfunded Development Impact Bond, Homestrings, the investment portal, is hosting a $2.5 million issue for The Cameroon Cataract Performance Bond, a Fred Hollows Foundation-led conditional grant contract to launch and operate the Magrabi-ICO Cameroon Eye Hospital (MICEH), a facility that will provide cataract surgeries in the West African country. Development Impact Bonds allow programs which are sponsored by donors or host country governments to raise upfront funding from private investors, who earn a return - paid by the sponsor - if the program achieves certain pre-agreed goals.

And finally this week, Bright Africa, the ongoing research data from financial analytics provider and investment advisor RisCura, has found that global investors found much to excite them on the continent in 2015, making $4.3 billion in fundraising commitments and driving up private equity multiples through increased competition for deals on the back of higher growth expectations. There are a number of interesting data points for you to review.

To read more on these and other stories from the last week, please scroll down for the abstracts and links.

In its second deal in as many weeks, CDC backs ARM Cement with $140 million
Deals News...
Private Equity 
Abraaj exits $150mln Unimed via IPO  
Emerging markets private equity firm The Abraaj Group has fully exited its investment in Tunisian pharmaceutical company Unité de fabrication de médicaments or Unimed in the Tunis Stock Exchange's first IPO of 2016. The offer, which was 32.6 times oversubscribed, was priced at 11.8 Tunisian Dinars, giving the company an implied market valuation of approximately $150 million. Abraaj first invested in Unimed in 2011, partially exiting its holding in December 2015.
Private Equity 
CDC backs ARM Cement with $140mln
In a second investment in as many weeks, CDC, the UK development finance institution is investing $140 million in ARM Cement, a producer of cement, lime and fertilizer with operations in Kenya, Tanzania and Rwanda. As a result of the investment, Ketso Gordhan, CDC's Head of Africa, will join ARM's board.
Private Equity 
Quantum Global backs Angolan timber with $50mln 
In a deal with the Government of Angola, Quantum Global is leasing over 80,000 hectares to develop large-scale wood fiber plantations in the country's Planalto region. As part of the 60-year concession, Quantum aims to invest $50 million over the next 5 years in establishing new plantations, infrastructure and wood processing industries.
Private Equity 
Adenia backs Opham in undisclosed deal 
In the latest deal for its €96 million Fund III, Mauritius-headquartered private equity firm Adenia Partners is taking an undisclosed stake in Opham, a pharmaceutical products wholesaler in Madagascar. A family office and Dutch Development bank FMO invested alongside Adenia in the deal.
Private Placement 
PIC spends $87mln and takes 1.2% Barclays stake  
Last week the Public Investment Corporation, South Africa's state-owned investment manager, confirmed that it is spending approximately $87 million to acquire 10% of the shares offered in Barclays' accelerated book build to dispose a block of its holding in Barclays Africa Group. The placement of 12.2% of Barclays' stake in the subsidiary was priced at a 7% discount to the JSE-listed company's market price and attracted significant domestic and international investors. 
Funds & Financing News...
Private Equity
Sarona completes primary fund allocation for Fund II
Sarona Asset Management, the frontier and emerging markets investment manager, has announced that it has completed its allocation to the portfolio of primary funds for Sarona Frontier Markets Fund 2, the $150 million private equity fund-of funds that closed in December 2014. The fund's portfolio, which now includes thirteen primary funds, three secondary funds and one co-investment will look to deploy its remaining secondary and co-investment allocation over the next 12 to 18 months.
Crowdfunding
First crowdfunded DIB seeks $2.5mln
In what will be the first ever crowdfunded Development Impact Bond, Homestrings, the investment portal, is hosting a $2.5 million issue for The Cameroon Cataract Performance Bond, a Fred Hollows Foundation-led conditional grant contract to launch and operate Magrabi-ICO Cameroon Eye Hospital (MICEH), that will provide cataract surgeries in the West African country.
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Africa Capital Digest's
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*Headquarter and Regional Office contact details
*Quick reference indexes of fund managers and portfolio companies by sector

Projects & Portfolio Companies...
Telecoms
Helios Towers Africa in DRC sale-leaseback deal
In an undisclosed sale-leaseback deal, Helios Towers Africa, which has one of the most extensive tower networks in Africa, has agreed to acquire approximately 950 telecoms towers in the Democratic Republic of Congo, boosting the private equity-backed company's tower coverage on the continent to 6,500 owned towers. The transaction will help Bharti Airtel, the assets' seller, reduce its debt and operating expense burden.
Policy, Regulation & Compliance...
South Africa lukewarm on bank buyouts
South Africa's Reserve Bank has signaled its wariness to potential private equity deals for the country's banks in comments made to reporters by the institution's Deputy Governor last week. "As a regulator, we would not be comfortable with private equity play for any of the banks," Kuben Naidoo said, without mentioning any specific bank, in Pretoria.
Trends & Perspectives...
Trends
Private Equity funds raised, deal multiples rise in 2015 
Bright Africa, the ongoing research data from financial analytics provider and investment advisor RisCura, has found that global investors found much to excite them on the continent in 2015, making $4.3 billion in fundraising commitments and driving up private equity multiples through increased competition for deals on the back of higher growth expectations.
Companies, People & Profiles...
People
AFC appoints Obama Africa advisor to Board 
Grant Harris, a former Special Assistant to the President and Senior Director for African Affairs for the Obama administration, is joining the Board of Africa Finance Corporation, the multilateral finance institution, which was established in 2007 to catalyze private sector infrastructure investment across Africa.
People
Rocket Internet shuffles supervisory board 
As part of a move to increase the number non-shareholders on its Supervisory Board, Rocket Internet announced that Stefan Krause, the former Chief Financial Officer of Deutsche Bank and Pierre Louette, Chief Executive Officer Delegate of French telecoms company, Orange will be proposed for election to the Board at the company's annual general meeting in June.
Current Job Postings...
Highlighted Job...             
Investment Associate at Enko Capital 
Based in Johannesburg, South Africa
Principal at CrossBoundary 
Based in Abuja, Nigeria
Principal at CrossBoundary 
Based in Johannesburg, South Africa
Investment Associate at CrossBoundary 
Based in Bamako, Mali
Associate at CrossBoundary 
Based in Johannesburg, South Africa
Private Equity Associate at Musa Capital 
Based in Johannesburg, South Africa
Investment Analyst at Enko Capital 
Based in Johannesburg, South Africa
Investment Analyst at Kappafrik Group 
Based in Lagos, Nigeria
Upcoming Conferences...
Highlighted Event...             
18th Annual Africa Energy Forum 
London, June 21st to June 24th, 2016 
Global Private Equity Conference 
Washington, DC, May 9th to May 12th, 2016 
Sub-Saharan Islamic Finance Convention 
Kampala, May 10th to May 11th, 2016 
The Global African Investment Summit Kigali
Kigali, September 5th to September 6th, 2016 
Kenya International Renewable Energy Congress 
Nairobi, October 3rd to October 5th, 2016 
8th Africa PPP Conference & Showcase 
London, October 24th to October 26th, 2016 
And finally...
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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