December 22, 2014 
The weekly roundup of Africa's Private Capital news


 

In our last issue for 2014, here's the latest digest of the most noteworthy private equity, venture capital and infrastructure financing deal news and investment insight related to Africa that was published over the last seven days.  Feel free to share it with interested colleagues and/or partners.  If they would like to receive their own weekly copy, they're more than welcome to sign up here.  
 
Many thanks for reading Africa Capital Digest in 2014.  We'll be back with our next issue on January 5th, 2015.  Until then, please accept our best wishes for a pleasant holiday season and a prosperous New Year.

As ever, if you'd like to get in touch or share any tips or comments, please contact me at acunningham@africacapitaldigest.com.

The week in  brief...

As the year draws to a close and the holiday season in much of the world kicks into high gear, one might be forgiven for thinking that private equity, infrastructure financing and venture capital investment in Africa would have slowed to a trickle.  That, in fact, was not the case last week.  Perhaps it was the need to tie up some loose ends before heading off on vacation, but deals were done, new funds were launched and loans and grants were made.

 

The Abraaj Goup and its deals made a number of headlines last week.  In its first deal in Algeria, it took an undisclosed stake in transport and logistics business, La Fleche Bleue Algerienne.  In doing so, they aim to benefit from the high growth rates being posted across several sectors in Algeria which are served by the company.  In other news, the $140 million takeover battle between Abraaj subsidiary, Abraaj Investment Group, and US Cereal maker Kellogg's to acquire Bisco Misr rumbled on.  For the third time in a month, Kellogg's upped its bid for the Egyptian snack maker, trumping Abraaj's revised offer which it made earlier last week.  The ball is now back in Abraaj's court once again. 

 

Staying in Egypt, there were a couple of exit announcements as well last week.  Once again, The Abraaj Group partially exited its stake in Integrated Diagnostics Holdings in a sale to private equity firm, Actis.  The deal gives Actis a 21% stake in the Egyptian healthcare firm.  Meanwhile Qalaa Holdings, the former Citadel Capital, continued its strategy of divesting itself of non-core assets with the announcement that it was selling Alexandria Automotive Castings and Amreya Metal Company for some $36 million to a consortium of investors led by a founder of both firms, Ahmed Sid Ahmed.  The deal is expected to close in January 2015.

 

On the fund raising front, there were a number of interesting bits of news last week.  GEMfonds is teaming up with The Infrastructure Bank and Sigrun Partners to raise a $500 million infrastructure fund targeting deals in Nigeria.  The fund will make loans and investments in both greenfield and brownfield infrastructure opportunities.  London-based Duet Group, the global alternative asset management firm, announced plans to raise a $300 million sub-Saharan private equity fund.  The fund, the firm's first dedicated Africa fund, will target consumer goods, healthcare and financial services companies in a number of countries.  It's expected the first close will take place in at the end of the first quarter next year, with the final close taking place by the end of next year.  Additionally, investment banking group Eczellon Capital announced plans to launch a $250 million West Africa-focused private equity fund.  The fund, which has already garnered significant investor commitments, will target opportunities in energy, power, infrastructure and other active sectors in West Africa.  It's anticipated to close between the second and third quarters of 2015.  


 
Once again last week, the DFI sector was especially active providing $1 billion in commitments to African projects.  The African Development Bank has approved a $500 million debt/equity package to support the launch of the Development Bank of Nigeria.  The Bank's brief will be to focus on providing micro, small and medium-sized businesses with financing.  Africa Finance Corporation announced the close of a $300 million dual tranche club facility last week, having received $636 million in commitments from 22 lenders.  And the World Bank has approved a $200 million loan for the construction of a multipurpose dam in Kenya's coastal region.  Aside from improving water supplies to this populous and drought-prone region, it's planned to deliver 34 megawatts of power and irrigate significant areas of land in the area.


 
And finally, South Africa's Business Day reports that Namibia plans to start tapping markets and investors as early as next year to finance its $19 billion, five year development plan and upgrades its ports, roads, railways and airports in a bid to become a major regional transport hub.  It's an ambitious number, and it will be interesting to see whether investors' appetite for these African infrastructure opportunities will remain healthy.

       

To read more about these and other stories in this active week, please scroll down and review the headlines, abstracts and links. 

Deal News...
Private Equity
Kelloggs outbids Abraaj for Bisco Misr...again // reuters.com

For the third time, US cereal maker Kellogg's has raised its bid for snack maker Bisco Misr, trumping Abraaj Investment Group's latest offer which had been made earlier in the week.  The $140 million takeover battle has been rumbling for the last month when Kellogg's scuppered Abraaj's original offer for the Egyptian firm.  

Private Equity
Abraaj makes first Algerian foray with logistics firm stake // ventures-africa.com

The Abraaj Group has acquired an undisclosed stake in La Fleche Bleue Algerienne, a 

10-year old Algerian transportation and logistics company.  The deal is Abraaj's first in Algeria, and is driven by the opportunity offered by the rapid growth in the industries the company services.

Private Equity
Abraaj sells stake in Egypt's IDH to Actis // thenational.ae

In exit news, The Abraaj Group is selling a part of its stake in Integrated Diagnostics Holdings to Actis.  While terms of the deal were not disclosed, The National reports that the deal gives Actis a 21% stake in the Egyptian private sector healthcare firm. 

Private Equity
Amethis Finance takes 30% stake in Ramco Plexus // techmoran.com

Amethis Finance has acquired a 30% stake in Kenyan packaging and printing group, Ramco Plexus.  Terms of the deal were not reported.  It's expected that the investment will help support Ramco's planned regional expansion through acquisitions and strategic partnerships.  

Private Equity
Qalaa plans metallurgy portfolio holding exits in January // tradearabia.com

As it continues to pursue its strategy of disposing of non-core assets, Qalaa Holdings has announced that it is selling two of its metallurgy companies, Alexandria Automotive Castings and Amreya Metal Company, to a group of investors led by the founder of the companies, Ahmed Sid Ahmed.  The deal, which is worth $36.2 million, is expected to close in January 2015.

Read more...

Private Equity
Angola's Sovereign Wealth Fund invests in hospitality school // swfinstitute.org

Fundo Soberano de Angola , (FSDEA), Angola's sovereign wealth fund, is investing in the construction of a new hospitality school in the province of Benguela.  The deal is part of the fund's strategy to boost returns and employment as it tries to establish a tourism industry in the country and across the greater region.  

Private Equity
Fig Tree snags a 70% stake in IMX's Ntaka Hill project // northernminer.com

Fig Tree is making a $5.88 million cash investment in IMX Resources' Ntaka Hill nickel project in south eastern Tanzania.  The deal gives Fig Tree, who will also fund the nickel project through the completion of a feasibility study in the next five years, a 70.65% stake.  The acquisition will be made from Fig Tree Resources Fund II.


The Abraaj Group takes a stake in La Fleche Bleue Algerienne in its first Algerian deal
Image Credit: La Fleche Bleue Algerienne            
Fund News...
Infrastructure
GEMfonds in $500mln infrastructure fund raise in 2015 // thisdaylive.com
Emerging Markets investment fund manager GEMfonds is teaming up with The Infrastructure Bank and Spanish investment bank and asset manager Sigrun Partners to float a $500 million fund focusing on loans and investments to both greenfield and brownfield infrastructure opportunities in Nigeria.
Private Equity
Duet Group targets $300mln for new sub-Saharan fund // lbowire.com
Duet Group is launching a $300 million fund which will invest in businesses in sub-Saharan Africa.  The fund, the firm's first dedicated Africa fund, will target consumer goods, healthcare and financial services companies in a number of countries.  It's expected the first close will take place at the end of the first quarter of next year, with the final close taking place in December 2015.
Private Equity
Eczellon floats $250mln West Africa-focused fund // businessdayonline.com
Investment bank Eczellon Capital is launching a $250 million private equity fund to target opportunities in energy, infrastructure, oil and gas, power and other active sectors in West Africa.  The fund is expected to close between the second and third quarters of next year.
Private Equity
Sarona closes second fund of funds at $150mln // saronafund.com
Sarona Asset Management held the final close of its second private equity fund of funds, raising a total of $150 million from a mix of institutional investors, family offices and high net worth individuals.  Sarona Frontier Markets Fund 2 will invest through local private equity firms in profitable, growth stage businesses in a number of frontier markets, including Africa.
Private Equity
CDC backs Africa Renewable Energy Fund with $20mln // cdcgroup.com
CDC has committed $20 million to the African Renewable Energy Fund, managed by Berkeley Energy, to support the development of renewable energy in sub-Saharan Africa. The capital will be used to invest across the renewable sector, primarily targeting small hydro, wind, solar, geothermal and biomass companies.
DFI
AfDB approves $500mln for Development Bank of Nigeria launch // mfw4a.org
The African Development Bank has approved a financial package consisting of $450 million in loans and $50 million in equity to support the launch of the Development Bank of Nigeria.  The Bank will be dedicated to the financing of micro, small and medium-sized businesses in Nigeria.
DFI
AFC wraps up $300mln in oversubscribed raise // ventures-africa.com
Africa Finance Corporation announced the close of a $300 million dual tranche club facility last week.  According to a press release on AFC's website, the facility was more than two times oversubscribed during the primary and secondary market process with 22 lenders making a total of $636.5 million in commitments.
DFI
World Bank approves $200mln for Kenyan dam // wsj.com
The World Bank has approved a $200 million loan for the construction of a multipurpose dam in Kenya's Kwale county.  As well as improving water supply to Kenya's populous and drought-prone coastal region, the dam is expected to produce 34 MW of power and help put at least 2600 hectares of land under irrigation.
DFI
World Bank and others contribute $100mln to ZIMREF // ventures-africa.com
In another sign of rapprochement following years of disagreements, The World Bank, in partnership with 6 European donor countries, is set to contribute more than $100 million to the Zimbabwe Reconstruction Fund, (ZIMREF).
Sectors & Strategies...
e-Commerce
7 African countries with booming ecommerce markets // ventureburn.com
A list of 7 countries with active and growing ecommerce industries making significant contributions to the the country's GDP.  It makes for a brief but interesting summary of the recent major developments in each.
Infrastructure
Namibia to tap markets for $19bln over next 5 years // bdlive.co.za
Namibia plans to start tapping the markets and investors as early as next year to raise finance to support its five-year development plan to become a major transport hub for the region.  The funds would be used to upgrade its ports, railways, roads and air transports hubs.
Mobile
Mobile operators setting up VC funds across Africa // afkinsider.com
Instead of acquiring startups or mimicking their ideas and building them in-house, mobile operators in Africa are increasingly funding mobile startups directly in a number of different ways.  This article looks at some of the initiatives under way and assesses how the eco-system will develop.
Perspectives & Trends...
Perspectives - Infrastructure
Innovative financing for Africa's massive projects // un.org
Using the Grand Ethiopian Renaissance Dam project as an example, the authors look at the different domestically financed approaches African countries are taking to bankroll their enormous infrastructure development projects.
Perspectives - Venture Capital
Investment in Africa's startups doubles to $26.4mln in 2014 // disruptafrica.com
An article summarizing the findings of VC4Africa's Venture Finance for Africa report which found that startups raised $26.4 million in capital in 2014, compared to $12 million in 2013.  Additionally,  the average investment per deal rose to $200,000 from $130,000 in 2013.  The criteria for success in raising a round of venture financing were also explored with some key takeaways for those african entrepreneurs looking to raise their next venture round.   
Trends - Venture Capital
Africa's tech trends; a review of 2014 // howwemadeitinafrica.com
A reflection by Tom Jackson who writes a fortnightly tech trends column for How we made it in Africa on the key trends and developments in tech and how they are likely to play out in 2015.
Companies, People & Profiles...
Company News
AfrAsia Bank sells 9.5% stake to National Bank of Canada // cnbcafrica.com

National Bank of Canada is taking a 9.5% stake in Mauritius commercial and investment banking group Afrasia Bank, with an aim to increase the size of their shareholding in the near future.  The deal is National Bank of Canada's first in Africa.

Read more...

Company News
UBA Capital changes name to United Capital // ventures-africa.com

At an extraordinary AGM in Lagos last week, UBA Capital's shareholders approved the motion to change the name of the financial services company to United Capital.  The company's board of directors had requested the name change to mark its independence from UBA following the Central Bank of Nigeria's mandate that all banks should disassociate themselves from all non-commercial banking activities.

Read more...

People News
Blackwater founder's new private equity gig // nationaldefensemagazine.org

A profile of Erik Prince, the founder of US private security contractor Blackwater Worldwide, and his focus following the sale of his company in 2010.  He's the Chairman of a small private equity fund, Frontier Resource Group, and focuses a lot of his time on investing in Africa. In a separate item last week, Bloomberg reported that South Sudan has commissioned Prince to help repair damaged oil facilities and boost output cut by a year of civil war. 

Read more...

Current Job Postings...
Partner, Africa Investments at LeapFrog Investments

Based in Johannesburg, South Africa 

Read more...

Investment Director for Pan African Investment fund

Based in London, UK 

Read more...

Director, LeapFrog Labs at LeapFrog Investments

Based in London, UK 

Read more...

Director, Value Creation at LeapFrog Investments

Based in London, UK 

Read more...

Associate for Global Private Equity firm

Based in South Africa 

Read more...

Managing Director for African Private Equity firm

Based in Nairobi, Kenya

Read more...

Managing Director for African Private Equity firm

Based in Johannesburg, South Africa

Read more...

Deal Lead for Renewable Energy Investing at Google 

Based in Mountain View, CA, USA

Read more...

New to AfCD this week
CEO, Private Equity for Investment Banking Group 

Based in Johannesburg  South Africa

Read more...

Partner for Africa practice at Commercial Law firm 

Based in London, UK

Read more...

EVP for MENA-focused Private Equity fund 

Based in Abu Dhabi, UAE

Read more...

General Manager for Venture Capital group 

Based in Juba, South Sudan

Read more...

Analyst for MENA-focused Private Equity fund 

Based in Riyadh, Saudi Arabia

Read more...

Upcoming Conferences...
Powering Africa: Summit  

Washington, DC, January 28th to January 30th, 2015 

Read more...

2015 SAVCA Annual Private Equity Conference 

Stellenbosch, February 12th to February 13th, 2015 

Read more...

South African Impact Investing Conference 

Johannesburg, February 16th to February 17th, 2015 

Read more...

17th Annual Africa Business Conference 

Cambridge, USA, February 27th to March 1st, 2015 

Read more...

2nd Annual Infrastructure Project Financing Africa 

Cape Town, March 2nd to March 4th, 2015 

Read more...

Somali Investment Forum 

Nairobi, March 8th to March 10th, 2015 

Read more...

12th Annual AVCA Conference 

London, April 27th to April 29th, 2015 

Read more...

Global Private Equity Conference 

Washington, DC, May 11th to May 14th, 2015 

Read more...

Africa Financial Services Investment Conference 

Brighton, May 12th to May 15th, 2015 

Read more...

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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