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Weekly Wrap, July 4th, 2016; Wendel, Nedbank, Leaf Capital and others make private capital news

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Last week in brief…July 4th, 2016

In announcing its third direct Africa deal, private equity group Wendel was responsible for the largest private equity transaction of the week, committing to spend up to €120 million over the next few years to acquire a 40% stake in SGI Africa, a pan-African developer and operator of shopping malls. SGI Africa was launched in 2015 by CFAO Group, a distributor of brands, which retains 40% of the company. The balance of 20% will be held by FFC, a partnership between CDC International Capital and the Qatar Investment Authority. The deal brings Wendel’s total investment in African companies to more than €800 million since 2013.

In dollar terms, the largest chunk of capital was being lined up by Africa Finance Corporation which is acting as the lead arranger of a $425 million senior mezzanine facility for New Age, an oil and gas exploration, development and production company with assets in Africa. AFC is investing $75 million in the deal, with EIG Global Energy Partners and a Middle East-based Sovereign Wealth Fund are among the other lenders on the deal.

Originally announced in November last year, Atlas Mara‘s cash and share deal to buy Finance Bank of Zambia has now closed. Atlas Mara ended up paying approximately $61 million and 3.3 million shares of Atlas Mara stock, a slight increase on the price agreed when the deal was originally announced. The plan is to combine Finance Bank of Zambia with its existing Zambian subsidiary, BancABC Zambia, creating one of the largest banks in the country. The pro forma combined assets of Finance Bank of Zambia and BancABC Zambia as at the end of December 2015 totaled approximately $567 million.

Nedbank Private Equity is joining the roster of Comsol’s investors following the private equity firm’s participation in a deal that saw the wireless access provider benefit from an initial R500 million or $34 million of investment. As a result, Nedbank becomes a 25% shareholder in Comsol, alongside existing shareholders Convergence Partners and the company’s management team.The capital will be used to help the company launch Comsol Fibre Connect, a nationwide open access high-speed carrier grade data network.

Mezzanine fund manager Vantage Capital has disbursed $8.5 million to Vumatel, the South Africa fibre-to-the-home service provider, in the second and final tranche of a $17 million expansion capital facility. The deal is the latest transaction for Vantage’s third mezzanine fund which is targeting a final close of $270 million, 40% of which is being allocated to South African opportunities. Originally agreed in April this year, the mezzanine facility was structured in two equal tranches of R125 million or $8.5 million, available for draw down upon the achievement of certain operational and financial goals by the company. It seems progress has been quick.

Leaf Capital, the Cape Town-based corporate advisory, private equity and property fund management firm, is taking a significant minority stake in Wellness Warehouse. The deal is being transacted through Leaf Capital Infinitus, the firm’s open-ended fund that was established in early 2013. Wellness Warehouse is specialist retailer of healthcare and wellness products which it sells through a network of 16 brick-and-mortar stores in South Africa as well as through its online store.

Among the latest trend and data pieces published, Deloitte‘s 2016 Private Equity Confidence Survey expects private equity activity in South Africa, West Africa and East Africa to increase over the next 12 months, but at marginally lower levels than in the same survey in recent years. Opportunity is not evenly spread – there’s optimism for East Africa’s favorable economic climate but pessimism about West Africa’s prospects while South Africa’s economy is expected to remain lethargic.

And finally, with all the hype surrounding the Brexit vote, an analysis of the impact of an eventual “Brexit” from the EU on African trade, investment and security policy in three of the UK’s most important markets on the continent – South Africa, Nigeria and Kenya.

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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