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Weekly Wrap, December 5th, 2016; Carlyle, Capitalworks, TLG Capital and others make private capital news last week

Last week in brief…December 5th, 2016

Carlyle‘s dedicated sub-Saharan Africa fund has made its second deal of 2016 by agreeing to buy a majority share in CMC Networks, a South Africa-headquartered provider of managed connectivity services for an undisclosed amount. The transaction, which brings the total number of deals for the fund which closed at almost $700 million in 2014, gives Investec Equity Partners a full exit from CMC, which it first backed in 2012.

Bigger, faster growth seems to be the expectation for CMC following the deal. Fresh capital plus access to Carlyle’s extensive geographic and sector network will provide a significant boost to CMC’s strategic expansion plans.

Staying in South Africa, private equity fund manager Capitalworkshas acquired what’s being described as a “significant interest” in IQ Business, a leading management consulting firm in South Africa. Tiso Holdings is also investing alongside them. Apparently, Capitalworks had first approached Business IQ about a possible deal in 2012, and has been monitoring the company’s activities and growth ever since. IQ Business’s strong management team, brand and market share were all key motivations for the investment.

TLG Capital made its first investment in Liberia last week in an undisclosed deal for Snapper Hill Clinic in Monrovia. The investment, which is described as “growth capital structured as debt”, is the latest deal for TLG’s Credit Opportunities Fund, an open-ended investment vehicle which expects to have $30 million in commitments by the end of the year. The debt capital will be used to support the privately-held outpatient clinic’s expansion plans which include opening two new clinics and increasing the number of patients served annually to more than 50,000.

Heading north of the Sahara, NBK Capital Partners, a private equity firm headquartered in Dubai, is investing in Kaumeya Language School, a K through 12 language school based in Alexandria, Egypt. The European Bank for Reconstruction and Developmentis also providing financing. The school plans to use the capital to expand its current campus, upgrade facilities and modernize its classrooms. The deal is the sixth education investment made by NBK Capital Partners through its four funds which target opportunities in consumer-centric middle market companies in the Middle East and North Africa.

Having made a commitment to Catalyst Principal Partners’ first fund in 2011, The European Investment Bank is mulling whether to re-up for the East Africa-focused private equity firm’s second fund with an $18 million commitment.  The fund, which is targeting a final close of $175 million, will pursue a similar growth capital investment strategy to its predecessor fund, targeting strategic minority or control transaction opportunities in emerging and mid-sized companies which are expected to benefit from the demand created by East Africa’s emerging middle class and rapidly urbanizing society.

In company news, a friendly fund administration takeover got some attention. Channel Islands-headquartered Sanne is acquiring International Financial Services, a fellow fund and corporate administration firm based in Mauritius in a $127 cash and share million deal. It seems a solid strategic move – the deal will give Sanne a significant emerging markets platform in a major international finance center for foreign investment into Africa and India. Sanne will pay approximately $91 million in cash, with the balance of the agreed price being met by the issue of approximately 5.8 million consideration shares.

And finally, a contributed article to Africa Capital Digest this week penned by Ibrahim Sagna, Head of Financial Advisory at Africa Finance Corporation. He looks at the rise and application of permanent capital vehicles for investment in Africa and highlights the key things for investment firms to consider.

As always, you can review these and other stories by clicking through to this week’s complete issue of Africa Capital Digest.

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