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Weekly Wrap, March 27th, 2017; Carlyle, PineBridge, Ascent and others make private capital news last week

Last week in brief…March 27th, 2017

Africa’s private equity market watchers got a jolt on Friday. Not an unwelcome one, you understand, in fact rather the opposite. The biggest transaction in some time was announced by The Carlyle Group who have agreed to acquire Royal Dutch Shell‘s onshore assets in Gabon in a $587 million deal. The transaction is being executed through Assala Energy, an oil and gas exploration and production company established by Carlyle in 2016, and the capital will be deployed from two of Carlyle’s funds—the $2.5 billion Carlyle International Energy Partners fund and Carlyle’s $698 million Sub-Saharan Africa Fund.

The deal, which is expected to complete during the summer, is certainly the biggest by far of 2017 and could get even bigger. The deal calls for the assumption of the liabilities of the assets in question, which include a $285 million loan, and Shell could earn up to $150 million more on the deal depending on agreed commodity price and production performance criteria.

In terms of size, Carlyle’s deals dwarfed the other transactions of the week. In the financial services sector, AMCON, the Nigerian entity set up to house Nigeria’s non-performing bank assets in 2010, has sold one of those, namely Keystone Bank, after a competitive bidding process to a consortium of local investors. According to reports, the price paid by the Sigma Golf-Riverbank consortium was $81.5 million.

In another financial services transaction, South African asset manager Sanlam has struck a deal to acquire PineBridge Investments‘ majority stake in its East African business. Terms for this deal were not disclosed. The deal expands Sanlam Group’s footprint and capabilities in the region and helps the South African financial services company fulfill its strategy of building a significant market leadership position in the region.

Staying in East Africa, private equity firm Ascent Capital is making an investment in Kisumu Concrete Products, a Kenyan construction materials manufacturer. The undisclosed amount of capital will be used to increase the company’s production capacity and help it continue to improve the quality of its products and implement international quality standards. This in turn will allow the company to expand its market share in the region, which is reportedly experiencing something of a construction and real estate boom currently.

In an agriculture deal, CDC, the UK government’s development finance institution, and social impact investor AgDevCo have teamed up to back Jacoma Estates with $11.5 million in equity and debt. The capital will be used to fund the macadamia nut producer’s expansion plans for its farming operations in Northern Malawi. CDC is providing the lion’s share of the capital, some $8 million in equity, whilst AgDevCo is providing the balance of $3.5 million as a mix of debt and preference shares. In addition to helping develop the operations of Jacoma’s Tropha Estates which produce macadamia nuts, paprika and chili, the capital will provide local smallholders with up to 100 acres of year-round irrigation.

In service provider company news, there was another marriage between two Mauritius-based trust and corporate services entities. Imara Trust announced it had acquired 100% of its fellow management company, FiducieForte. The deal adds more than 30% to Imara Trust’s size.

Finally, there were a couple of high level people moves that came to our attention. Firstly, after 5 months of search, CDC‘s Board announced that it is appointing Nick O’Donohoe to be their new CEO and succeed Diana Noble who will step down from the role later in the year. And Peter Baird, former head of Standard Chartered‘s Africa private equity business has started in his new role as Managing Principal of Investec’s Africa-focused private equity funds. He will head up the investment team responsible for investing and managing two funds totaling $450 million in size.

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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