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Weekly Wrap, November 14th, 2016; Adenia, Flint Atlantic, ARC and others make private capital news last week

Image Credit: BioTherm Energy

Last week in brief…November 14th, 2016 

A couple of healthcare-related deals, an energy and infrastructure fund exit and significant fund close garnered most of the attention in Africa’s private equity world last week.

Nigeria-based Flint Atlantic Capital Partners and US-based Polaris Partners have teamed up to back Africa Healthcare Network (AHN), Rwanda’s largest dialysis and kidney care services chain in an undisclosed deal.  The transaction, which marks Polaris Partners’ first investment foray into sub-Saharan Africa, was led by by Dr. Kelechi Ohiri, Flint’s Managing Partner and Amy Schulman, a Venture Partner based in Polaris Partners’ Boston office. The fresh capital, which was provided via a convertible note, will be used to fund AHN’s expansion in Rwanda and across Africa over the next 2 years.

In other healthcare-related news, CIPLA Quality Chemical Industries is exploring a potential IPO for the business.  The firm counts two private equity firms among its shareholders – TLG Capital and Capitalworks – and manufactures combination therapy anti-retrovirals and anti-malarials under license from Cipla Ltd, an Indian pharmaceutical firm capital investment. As yet, the amount of capital and the potential timing of the listing have not been disclosed.

American Capital Energy and Infrastructure has sold its four energy investments, yielding aggregate proceeds of $108.6 million, representing a compound annual rate of return of 18.1% and a 1.32x return on invested capital from the investments made over a three-year period.

Of the four investments, two are in Africa—Azura Power Holdings, the majority shareholder of the Azura-Edo IPP, a 1,500MW power station in Nigeria and co-development rights and sole investment rights in Senegal’s planned 158MW Tadia Ndiaye Wind Project. In both instances, private equity firm Actis is involved in the acquisition of these assets, buying ACEI’s stake in Azura directly and the Tadia Ndiaye stake via its portfolio company, Lekela Power.

A strong fund first close for Adenia Capital IV, Adenia Partners‘ latest investment vehicle. Christophe Scalbert, a Principal based in Adenia’s Abidjan office, led the fund raise. At €180 million, the size of the fund dwarfs Adenia’s prior funds and will be more than double the size of Adenia III, a €96 million vehicle launched in 2012, if it hits its €230 million hard cap. A mix of international institutional investors, regional and European individual investors, entrepreneurs, family offices and foundations all contributed to the fund which will back profitable companies generating between $5 million and $40 million in a variety of sectors including consumer goods, business services, manufacturing, financial services, ICT and telecommunications, and hospitality.

In other deal news, African Rainbow Capital, the financial services and private equity investment firm set up by Patrice Motsepe, has acquired a 49% holding in Sinayo Securities. The fresh capital will be used by the equities brokerage firm to grow its institutional client base and broaden its brokerage service offering. Valuation terms for the transaction were not disclosed.

There were some interesting bits of perspectives from other publications or institutions last week. Not surprisingly, Donald Trump’s electoral triumph last week gave rise to sepculation on what his administration’s policy to Africa might look like. At Brookings Institution, Witney Schneidman looks at what we do know and how that might impact the engagement with the continent.

While big buyouts by private equity firms in Africa are rarer today, the number of smaller deals is rising as investors pick off opportunities that are too small for global funds. Fortune reviews some of the deals that point to that trend which took place on the continent recently. In a related vein, the growth of the private equity asset class in Africa has been too rapid, forcing prices of the limited pool of investable assets to rise, in the view of some analysts. South Africa’s BusinessLive reports on the perspective of some of the major industry executives.

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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