February 2, 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...            
TMT M&A Mkting barter
The week in  brief...

From their $374 million war chest for acquisitions in Africa, Old Mutual whipped out their check book again last week, this time to bump up their stake in Nairobi-headquartered insurer UAP Holdings.  In a $155.5 million deal, they reached an agreement to acquire stakes owned by AfricInvest, The Abraaj Group and Swedfund giving them another 37.3% of the company and allowing them to taka controlling stake of 60.7%.  Taken together with their transaction in the company earlier in January, last week's deal takes Old Mutual's investment in UAP to $253 million. 

 

Meanwhile Phatisa announced its eighth transaction from the $246 million African Agricultural Fund with an investment in Kenyan packaging manufacturer General Plastics.  Terms of the deal were unreported. According to a press release, the investment in a non-agricultural asset was motivated by the opportunity to take a stake in a firm that produces high-quality products that help to minimize food spoilage and waste.  And in another deal with undisclosed terms, the private equity division of Centaur Holdings is providing IPC Coal with a secured financing package to help accelerate the extraction of thermal coal reserves at its Nungu Colliery in South Africa. 

 

The most notable fundraising news of last week came from STANLIB with the announced closing of their maiden private equity infrastructure fund at R1.2 billion or approximately $103 million.  The majority of the fund was raised from South African institutional investors since its first close in March 2013. The fund has already invested more than 50% of the fund's commitments in new-build opportunities, mainly in renewable energy projects. 

 

Ascent Capital is planning to raise another $10 million for the Africa Rift Valley Fund by June 2015, capping the total at $60 million.  The fund targets businesses that are well-positioned to benefit form the rise of the consumer in Africa.  Guy Brennan, a Partner with the fund, tells Reuters that it looks likely that the fund will complete its first investment in an Ethiopian healthcare company wthin the next few weeks.  The fund's preferred deal size is between $2 million to $10 million.


 

Demand for Africa's government debt issuance shows no sign slacking.  Tunisia's

$1 billion bond generated orders of $4 billion, allowing the country to borrow at a lower than expected interest rate of 5.875% over 10 years.  This, in the same week that The Overseas Development Institute is warning of a potential Asian-style debt crisis in Africa as the strengthening dollar adds an expected $10.8 billion in currency costs.  A number of other government debt deals are in the pipeline, so we will watch to see to what extent demand wanes in the coming months.    

 

Finally, on the The Brookings Institution's blog, a call for the rising levels of infrastructure investments to be better coordinated, and are strategically and effectively applied across the region.  As part of their Foresight Africa 2015 project they identify six priorities for the region as they move to close the infrastructure gap.

 

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

Deal News...
Private Equity
AfricInvest, Abraaj, Swedfund sell UAP stake in $155mln deal // bloomberg.com

Having bought a 23.3% stake in UAP Holdings in early January, Old Mutual is now expanding its stake and buying the collective holding of AfricInvest, The Abraaj Group and Swedfund in a $155.5 million deal.  By acquiring the additional 37.3% of the company, Old Mutual takes control of the Nairobi-headquartered insurance group.

Private Equity
Phatisa's AAF makes investment in General Plastics // reuters.com

Phatisa is making an undisclosed investment in Kenyan packaging product manufacturer General Plastics from its $246 million African Agriculture Fund.  While the target is not an agricultural asset, good quality packaging is essential in minimizing spoilage and waste by extending the shelf-life of food.  The deal is the eighth investment made from the AAF, which is now more than 50% deployed.

Private Equity
Centaur Holdings provides financing to IPC Coal // energybusinessreview.com

The private equity division of Centaur Holdings has agreed to provide IPC Coal and IPC Mining with a secured financing package to help the company accelerate its opencast mining operations at Nungu Colliery in Mpumalanga Province in South Africa.  Terms of the agreement were not reported.  The capital will be used to start exploiting the colliery's underground reserves of thermal coal in February.

Private Equity
AfDB backs Cameroon's first renewable IPP // pv-tech.org
The African Development Bank's Sustainable Energy Fund for Africa is to release a $770,000 grant to JCM Greenquest Solar Corporation.  The Canadian private equity firm is developing plans for Cameroon's first IPP renewable energy project.  The grant will allow JCM to prepare environmental and social impact assessments for the project.
Venture Capital
Tugende backed by Echoing Green and Segal Family Foundation // vc4africa.biz

In January, motorcycle lease-to-own business Tugende received $780,000 to support working capital and expansion plans in an equity/debt deal.  The capital has been provided by private angel investors, the Segal Family Foundation and Echoing Green. The new investment follows an earlier round of $300,000 in December 2013.


building.co.ke
Old Mutual expands its stake in insurer UAP  in $155.3 million deal 
Image Credit: Building|KE        
Fund & Financing News...
Private Equity
STANLIB launches maiden $103mln infrastructure fund // africanreview.com
STANLIB has just finished raising its maiden private equity infrastructure fund which closed at approximately $103 million. The 10-year, closed end fund will take equity stakes in private sector infrastructure projects.  The capital will be targeted at South African infrastructure projects under development, with the remainder being invested across sub-Saharan Africa. A second fund, focusing on post-construction and operational infrastructure assets, is also under development.
Private Equity
Ascent Capital looks to expand fund to $60mln // reuters.com
With $50 million already committed, Ascent Capital is looking to raise an additional $10 million for the Africa Rift Valley Fund by June 2015.  The fund targets deal sizes between $2 million to $10 million in companies which are set to benefit from the rise of the consumer in Africa.  Partner Guy Brennan tells Reuters that it looks likely to complete its first investment in an Ethiopian healthcare company within the next two weeks.  Current investors in the fund include Norfund, the Development Bank of Austria as well as Kenyan corporate pension funds and private investors.
Credit
Investors scramble for piece of Tunisian debt issue // ft.com
International investors put in orders of $4 billion for the $1 billion government bond offered last week allowing the country to borrow at a lower than expected 5.875% rate over 10 years.  The strong demand comes on the back of boosted investor confidence following the election of the country's first freely-elected President last month.
Projects & Portfolio Companies...
Private Equity
Permira-backed Teraco expands funding facility to $34.5mln // techcentral.co.za

Data Center Operator Teraco Data Environments has increased the size of its medium-term funding facility to R400 million or $34.5 million.  The additional funding has been secured from Barclays Africa.  The capital will be used to construct a new data facility in Johannesburg.  European private equity firm Permira acquired Teraco in its maiden Africa deal in early December 2014.

Sectors & Strategies...
Agriculture
Aqua-Spark looks to build SSA aquaculture ecosystem // undercurrentnews.com
Dutch fund Aqua-Spark has found a warm reception to their pitch to build a global aquaculture eco-system. The plan is to make investments around the world to create a web of companies able to cooperate and advance each other. The fund announced its first two investments, one in US biotech company Calysta and the other in Chicoa Fish Farm in Mozambique for a total of $4 million recently.  The plan is to pilot and refine Calysta's fishmeal replacement technology at Chicoa Fish Farm and help both scale.
Credit
South Africa's IDC asked to mobilise $8.5bln over next 5 years // bdlive.co.za
Ebrahim Patel, South Africa's Economic Development Minister, has set the Industrial Development Corporation a "stretch target" to mobilise loans valued at R100 billion or $8.5 billion over the next 5 years.
Infrastructure
African Union targets private investors for infrastructure // bloomberg.com
At the African Union's annual summit in Addis Ababa last week, plans were announced for a new drive to encourage private capital investors to make investments to help address the lack of infrastructure across the continent. Bloomberg reports that priority projects under the Programme for Infrastructure Development need $68 billion by 2020 and an additional $300 billion by 2040.
Private Equity
Mergene plans to expand impact investments to $170mln // bdlive.co.za
Mergence Investment Managers is planning to double the size of assets under management dedicated to impact investments to $170 million this year.  The company provides capital, primarily through debt funding, to unlisted companies in the energy, housing, education and transport sectors.
Trends & Perspectives...
Trends - Infrastructure
Infrastructure CapEx in South Africa contracts by half // moneyweb.co.za
Nedbank Capital has just released figures showing that CapEx on infrastructure in South Africa contracted by close to 50% in 2014, a sign that the country is losing some of its sparkle as an investment destination. According to some analysts, the public sector needs to play a bigger role in committing capital to projects to encourage the private sector to follow suit.
Trends - M&A
East Africa sees $3.4bln in deals in 2014 // standardmedia.co.ke
According to Burbridge Capital's just-published East African Financial Review, there were 145 reported deals worth $3.4 billion closed in the East African region in 2014. The highest number of deals took place in the natural resources sector, while the Financial Services sector excited a lot of investor interest, recording 30 deals valued at approximately $516 million.
Perspectives - Credit
Strengthening dollar threatens debt crisis in sub-Saharan Africa // guardian.com
The Overseas Development Institute is warning that a strong dollar threatens to deliver sub-Saharan Africa an Asian-style debt crisis.  The rising value of the dollar will hand countries an additional $10.8 billion in currency costs, an equivalent of 1.1% of the region's GDP.   
Perspectives - Infrastructure
Infrastructure investment in Africa needs better coordination // brookings.edu
As levels of infrastructure investments in sub-Saharan Africa continue to rise rapidly, the emphasis now should be on ensuring that this funding is strategically and effectively applied across the region.  As part of its Foresight Africa 2015 project, The Brookings Institution identifies six priorities for the region as it moves to close the infrastructure gap. 
Companies, People & Profiles...
People News
Investec Property Fund appoints new CEO // bdlive.co.za

Nick Riley is set to take over as CEO of Investec Property Fund at the end of March when Sam Leon, the fund's current CEO, moves into a non-executive deputy chairman role.  Riley spent 9 years as an investment banker at at Investec Corporate Finance working with clients in the real estate sector.

Read more...

Company News
Beltone Private Equity to manage Arabian Investments // africaleader.com

Beltone Private Equity has signed a management agreement to manage Arabian Investments in exchange for 2% of the firm's capital value and 10% of its profits annually.  

Read more...

Current Job Postings...
Highlighted Jobs...            
Private Equity Analyst at African Capital Alliance 

Based in Lagos, Nigeria

Read more...

PERE Associate at African Capital Alliance 

Based in Lagos, Nigeria

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...

Principal for Private Equity firm 

Based in Nairobi, Kenya

Read more...

Manager for MENA-focused Private Equity office 

Based in Riyadh, Saudi Arabia

Read more...

New to AfCD this week
MD/EVP for prominent Private Equity firm 

Based in Abu Dhabi, UAE

Read more...

Private Equity VP for Quantum Global 

Based in Zug, Switzerland

Read more...

Executive Director, Financial Services for AFC 

Based in Lagos, Nigeria

Read more...

Senior Associate, Infrastructure and Real Assets 

Based in Zug, Switzerland

Read more...

Upcoming Conferences...
Highlighted Event...            
Powering East Africa  

Nairobi, March 25th to 27th, 2015 

Read more...

Investing in African Mining Indaba 

Cape Town, February 9th to February 12th, 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...

TMT M&A Forum 2015 

London, March 19th, 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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