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Weekly Wrap, May 1st, 2017; Ethos, Catalyst, Investec and others make private capital deal news

Last week in brief… Numbers were in short supply last week. By that we mean that all of Africa’s private equity deals reported came without their financial terms being disclosed. But deals there were, in all the main sub-Saharan regions.

In South Africa, Ethos Private Equity announced that it has led a deal in partnership with Nedbank Private Equity and the company’s management to acquire a majority shareholding from the founders of Little Green Beverages. In support of the investment’s growth strategy, former SABMiller executive Michael Benjamin has joined the compnay as its new CEO. The transaction is the ninth deal for the Ethos’s sixth fund, and the South African beverage producer joins a portfolio of assets which include Autozone, Twinsaver, Eazi Access and Neopak.

Staying in the south, Investec Asset Management made its second private equity-related deal of April by exiting its mezzanine investment in SA Taxi, the South African taxi financing company which it originally backed through its first private equity fund in 2011. SA Taxi extends credit to minibus taxi owners and entrepreneurs as well as providing its clients with a range of additional services to help them manage and grow their businesses. Currently, it has financed more than 27,000 taxis and has a loan book of over R7.2 billion (approximately $538 million) in size. Investec first backed SA Taxi in 2011.

Heading north and east, Catalyst Principal Partners announced the ninth (and final) investment for its first fund, taking a significant minority stake in Kensta Group, a Kenyan-headquartered conglomerate with operations in five East African countries. The fresh capital, combined with strategic help from Catalyst, will help Kensta restructure and push growth. The firm will focus on making strategic investments in attractive sectors and geographies as well as target opportunities in value-chain development.

On the western side of the continent, Oasis Capital Ghana is making an undisclosed private equity investment in Everpure Holdings, a water bottling company with operations in Ghana. The deal is being made on behalf of the Oasis Africa Fund, a planned $50 million vehicle that targets SME opportunities in Ghana and Côte d’Ivoire. Everpure, which was founded in 2008, produces, markets and distributes purified drinking water. The firm operates two factories in Ghana and has plans to establish a third, west of the country’s capital, Accra. The capital will be used to complete the construction of the new plant as well as acquire additional equipment and support working capital.

In fundraising news, the European Investment Bank is considering a $20 million commitment to International Housing Solutions’ second fund. IHS Fund II will target affordable and energy-efficient housing opportunities in sub-Saharan Africa, with a focus on Namibia and Botswana.

According to the private equity investor’s website, IHS Fund II, which held a first close in July 2014, has already attracted approximately $180 million in capital from several investors. To date, the new fund has backed six projects, providing a total of 1,630 housing units. Five of the projects have used the fund’s green investment facility which is designed to improve the use of energy, water and building materials in their developments.

There were some interesting perspective pieces this week. Ed Higenbottam of Verdant Capital highlights four key themes that are driving financial inclusion on the continent, which, as well as being an item at the top of Africa’s development agenda, is increasingly an driver for a broad range of market participants. In an article for AFK Insider, Kurt Davis looks at how short-term volatility and uncertainty in the Africa growth story create opportunities for hedge funds. He discusses some of the sectors which should be attractive to the asset class. And as South Africa’s recent credit rating downgrades are bound to have an impact on the level of M&A activity, Morne van der Merwe, a Partner at Baker McKenzie in Johannesburg, writes in BusinessDay about their likely effect and how things might evolve.

And finally, in a first, Vera Songwe, the IFC’s Regional Director for West and Central Africa, has been appointed Executive Secretary of the United Nation’s Economic Commission for Africa. She is the first woman to hold the position.

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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