February 23, 2015 
The weekly roundup of Africa's Private Capital news


 

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

This week's issue supported by...            
Marketing Partnership
The week in  brief...

The most notable deal news of the last week was the announcement that Actis is teaming up with wind and solar developer Mainstream Renewable Power to establish Lekela Power, a $1.9 billion pan-african renewable energy generation platform.  The company aims to provide between 700MW to 900MW of wind and solar power across Africa by 2018.  Actis is spending $220 million to take a 60% equity stake in the new company, with the balance being taken by Mainstream. The rest of the funding for the company will provided as debt by DFIs and South African banks.  The partnership will operate in a similar fashion to the two successful partnerships the companies have formed in Chile and South Africa, with Mainstream taking responsibility for the full end-to-end management and operation of the new company's projects.


 
Yet another battle to gain control of a listed food company seems to be raging in Egypt. Investment company Pioneer Holdings saw its bid to take Arab Dairy private trumped once again by Al-Nour for Dairy, a subsidiary of European dairy group, Lactalis.  The latest bid values Arab Dairy at $52 million.  Pioneer's first bid for the company in September last year valued the company at $35 million.

 

On the venture capital front there were couple of deals last week.  AngelHub Ventures made an undisclosed investment in e-book startup Snapplify.  The capital will be used to expand the company's product and team across the continent.  In another deal, African Courier Express landed a $2.6 million round of funding last week from a number of investors including the ePayments Growth Fund, a new $10 million fund launched by Interswitch to invest in innovative and disruptive payment companies across Africa.

 

In other fundraising news last week, ARM and Harith's planned $250 million closed-end private equity infrastructure fund held its first close at $91 million.  Notably, Nigerian pension funds are among the investors in the fund, thought to be the first infrastructure investments made by these institutions via the private equity route.  Other investors include the African Development Bank as well as the fund's joint sponsors.


 
Two reports last week about potential exits in 2015. In the first, prompted by the need to have a disposal from their first fund before raising their second, Bloomberg reports that Rockwood Private Equity is planning to sell portfolio company Tsebo Outsourcing. Meanwhile, Qalaa Holdings is mulling whether to exit from its remaining Egyptian food businesses - DIna Farms and Rashidi El-Mizan.  The investment company could realize approximately $300 million from the sales, which would be used to pay down debt as part of the company's turnaround strategy.


 
You can review these and other stories by scrolling down and reviewing the headlines, abstracts and links. 

Deal News...
Private Equity
Actis invests $220mln for 60% equity stake in Lekela Power partnership // ft.com
In the most notable deal this week, Actis is investing $220 million to take a 60% equity stake in Lekela Power, a new renewable energy business the investor is setting up in partnership with Mainstream, a wind and solar developer.  Mainstream will be putting up the remaining 40%.  The rest of the funding for the $1.9 billion company will be provided as debt by DFIs and South African banks.
Private Equity
Pioneer's bid for Arab Dairy trumped once more by Lactalis // reuters.com

In an ongoing battle for control of Egypt's Arab Dairy, financial investment firm Pioneers Holding saw its latest offer to the remaining shares in the company that it does not already own topped once more by Al-Nour for Dairy, a subsidiary of European dairy group, Lactalis,  The new bid values the company at almost $52 million.   Pioneers first offered to buy the company in September 2014, in a deal worth $35 million.

Private Equity
Synergy makes undisclosed investment in NeTPlus Advisory  // techcabal.com

Generalist private equity fund Synergy Capital has made a "multi-million dollar" investment in Lagos-based management consulting firm NeTPlus Advisory.  Terms of the deal were undisclosed.  Tech Cabal reports that the company intends to use the capital to ramp up its e-commerce and e-payments activities in Nigeria.  Synergy Capital reportedly invests up to $10 million per investment.

Venture Capital
ACE lands $2.6mln from new Interswitch fund and others  // techcabal.com
African Courier Express, (ACE), the e-commerce logistics company founded by ex-Jumia executives, has reportedly landed a round of $2.6 million from a number of investors.  The deal includes an $850,000 debut investment from Interswitch's new VC fund, the ePayment Growth Fund which was also announced last week.  The fresh funding will help ACE buttress its market position as competition heats up in the logistics market.
Venture Capital
AngelHub Ventures backs e-book startup Snapplify // disrupt-africa.com

AngelHub Ventures has made an undisclosed investment in fast-growing South African e-book startup Snapplify.  The capital will be used to expand the product and team across multiple countries.  As part of the deal, AngelHub's Michael Jordaan joins the Snapplify board.


nrcm.org
Actis and global wind and solar company Mainstream launch pan-african renewable energy platform Lekela Power
Image Credit: nrcm,org
Fund & Financing News...
Private Equity
ARM-Harith infrastructure fund holds first close at $91mln // allafrica.com

The planned $250 million closed-end private equity infrastructure fund launched by Asset & Resource Management Company and Harith General Partners has held its first close at $91 million.  As well as the two sponsors of the fund, other investors in the fund include Nigerian pension funds Chevron, Progress Trust and Total E&P together with the African Development Bank.  

Read more...

Credit
Ignoring warnings, planned African sovereign debt issuance still robust // ft.com

There seems to be no slackening in demand from sub-Saharan nations eager to tap the international bond markets in spite of warnings from the IMF against indebtedness as currency risk increases.  Cote d'Ivoire started a round of talks with potential creditors last week, and Angola, Tanzania, Uganda, Rwanda and Nigeria are all nurturing their own plans to sell sovereign debt this year.

Credit
Despite setbacks, plans for Tanzania's bond sale on track // ft.com

A corruption scandal that's led to ministerial resignations and a frozen tranche of aid as well as the prospect of turbulent elections have not derailed Tanzania's plans to issue debut sovereign debt in the next fiscal year.  It's speculated that the issue will look to raise $1 billion.

DFI
AfDB approves $145mln loan for Kenya-Tanzania power line // bdlive.co.za

The African Development Bank has approved a $145 million loan to help construct 508kms of transmission lines and substations, allowing the transfer of 2,000MW of electricity in either direction between Kenya and Tanzania.

Venture Capital
Interswitch launches $10mln growth fund  // africanbusinesscentral.com

Nigerian integrated payments company Interswitch has announced the launch of the new, $10 million ePayment Growth Fund which will invest in innovative and disruptive concepts in the payment industry across Africa. As part of the fund launch announcement, the fund revealed that it was making its debut investment of $850,000 by participating in e-commerce logistics company Africa Courier Express's second round.

Projects & Portfolio Companies...
Private Equity
Rockwood plans to exit Tsebo Outsourcing in 2015 // bloomberg.com

Rockwood Private Equity is planning to sell Tsebo Outsourcing Group in 2015 in what will be its first disposal from its $340 million first fund which was raised some 10 years ago.  Bloomberg reports that the firm needs to exit a portfolio company before raising its second fund. 

Private Equity
Qalaa mulls disposal of remaining food businesses // just-food.com

Qalaa Holdings is considering whether to sell the last two remaining Egyptian food companies in its portfolio - confectioner Rashidi El-Mizan and dairy firm Dina Farms. The investment company would realize approximately $300 million with the exits.  The proceeds of any sale would be used to pay down Qalaa's debt

The 2015 Guide to sub-Saharan Private Equity
Reserve today for 30% savings with pre-publication price
Make sure you reserve your copy of AfCD's definitive guide to the private capital investors, funds and investment firms in sub-Saharan Africa.  Once published in April, enjoy the following key benefits:
  • For LPs; review SSA GPs, their strategies and their funds  
  • For GPs; find potential co-investors, plan secondary acquisitions and sales 
  • For Corporates; source assets for acquisition, targets for divestitures
  • For Advisers; develop clients, transaction ideas and more
  Contact Teresa Hall at thall@africacapitaldigest.com to reserve your copy today.

Sectors & Strategies...
Insurance
Deals in Kenya's insurance sector will be robust // oxfordbusinessgroup.com

Consolidation in Kenya's fast-growing insurance sector are expected to continue to be robust in 2015 as higher capital requirements and the battle for market share drive deal activity.

PERE
Private Equity Real Estate funds focus on Nigeria // estateintel.com

According to data from information provider Preqin in late 2014, Africa's Real Estate investment fund industry is in relative infancy compare with a broader group of Africa-focused private equity funds.  A summary of some of the leading funds and what's motivating their appetite for deals.

Retail
Kenya's fast-growing retail market promising but challenging  // reuters.com
According to analysts, formal retail's low market penetration rates combined with Kenya's fast-growing economy are attracting the attention of international store chains and private equity firms eager to capture some of the value growth offered.  Entering the market is not without its challenges though.
Trends & Perspectives...
Perspectives - Private Equity
Buyout firms' focus shifts north from South Africa // bloomberg.com

South Africa is losing its position as the private equity industry's destination of choice on the continent.  Buyout firms are increasingly investigating opportunities north of the country where countries such as Kenya and Nigeria offer growth rates that are almost double those expected in South Africa.  

Read more...

Perspectives - Venture Capital
The changing landscape for African tech startup funding  // afkinsider.com

The gap between the amount of capital required by Africa's early stage companies and the capital that is available may be narrowing.  A look at the current state of early-stage funding, and how the number of sources of capital are proliferating.  

Companies, People & Profiles...
Profile
Q&A with Kris Senanu on Blackrock Capital's investment strategy // forbes.com

The founder of venture capital firm Blackrock Capital Investments talks to Forbes about his investing strategy, the criteria he looks for in the entrepreneurs and companies he invests in and where he sees the most promising opportunity. 

Read more...

Profile
Grindstone allows Knife Capital to optimize resources  // disrupt-africa.com

A brief, interesting profile of Knife Capital and its partners' approach to investing in and building companies. 

Read more...

Profile
Stellenbosch tech talent attracts global tech companies // moneyweb.co.za

A look at the venture capital ecosystem centered on Stellenbosch in South Africa's Western Cape, the rising interest from foreign investors in the companies being developed there and the requirements entrepreneurs and innovators should aim to fulfill to get backed and ultimately acquired. 

Read more...

People News
Tony Elumelu Foundation appoints new CEO // ventures-africa.com

An interview with Professor Reid Whitlock, who was appointed as the new CEO of the Tony Elumelu Foundation last week, in which he discusses his career, his vision for the foundation as well as the private sector opportunities and challenges offered by the continent.

Read more...

People News
Novare hires Nieuwendyk for Lekki Mall project // fanews.co.za

Novare Private Equity, the real estate investment manager, announced the appointment of Divan Nieuwendyk as Assistant Project Manager for the Lagos-located Lekki Mall development.

Read more...

Current Job Postings...
Deal Lead for Renewable Energy Investing at Google 

Based in Mountain View, CA, USA

Read more...

Private Equity VP for Quantum Global 

Based in Zug, Switzerland

Read more...

Investment Director for pan-African Private Equity fund 

Based in London, UK

Read more...

Investment Professional for Global Buyout fund 

Based in Nairobi, Kenya

Read more...

Deal originators for successful South African fund 

Based in Mombasa, Kenya

Read more...

Partner, Africa Investments at LeapFrog 

Based in Johannesburg, South Africa

Read more...

Director, TAS at EY 

Based in Cairo, Egypt

Read more...

New to AfCD this week
Private Equity Analyst for microfinance investor  

Based in Cape Town, South Africa

Read more...

Private Equity Analysts at Quantum Global 

Based in Zug, Switzerland

Read more...

Investment Analyst at Arkesden Private Equity 

Based in Johannesburg, South Africa

Read more...

Upcoming Conferences...
Highlighted Event...            
TMT MENA 2015 

Dubai, April 22nd, 2015 

Read more...

Africa Healthcare Summit 2015 

London UK, February 26th to February 27th, 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...

Wharton Club for Africa Investment Summit 2015 

Nairobi, March 8th to March 10th, 2015 

Read more...

TMT M&A Forum 2015 

London, March 19th, 2015 

Read more...

Powering East Africa 

Nairobi, March 25th to March 27th, 2015 

Read more...

Africa GRI 2015 

Johannesburg, April 21st to April 22nd, 2015 

Read more...

12th Annual AVCA Conference 

London, April 27th to April 29th, 2015 

Read more...

Africa Pensions & Sovereign Funds Investment Forum 

New York, May 7th to May 8th, 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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