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Abraaj in flurry of potential Africa deals

Over the last week to ten days, The Abraaj Group has featured in a number of private equity stories about planned or potential deals in Africa, ranging from news of three imminent deals in Sub-Saharan Africa to a potential $500 million investment to build a mid-tier hospital chain on the continent to leading a syndicate of investors to bid for a significant minority stake in Barclays Africa group.

In comments made during the World Economic Forum in Kigali, Abraaj Partner Sev Vettivetpillai revealed that the emerging markets private equity firm is in the final stages of its own internal process to make three investments in Sub-Saharan Africa. Bloomberg reports that they include a fertilizer business in Nigeria, an insurance company in Kenya and an industrial business in South Africa.

Once completed, these potential deals, which will range from $60 million to $150 million, will see the amount of capital deployed from the private equity firm’s $990 million Sub-Saharan Africa fund cross the 50% mark. The fund, which closed in early 2015, has already made two investments, one in South Africa and the other in Nigeria.

Meanwhile, to meet the expected demand for healthcare services from Africa’s growing middle class, Abraaj will reportedly spend up to $500 million to build a mid-tier hospital business on the continent. As part of this plan, the private equity firm is already in discussions to acquire the land for a planned 350-bed multi-specialist facility in Lagos and plans to buy several hospitals in Nairobi to form a healthcare cluster.

“We’re looking to build from the ground up because the assets do not exist,” Sev Vettivetpillai told Reuters.

In addition to Lagos and Nairobi, Abraaj is targeting Addis Ababa and Johannesburg for similar deals. According to Reuters, the deals will be financed by a combination of Abraaj’s own capital as well as similar amounts from other investors, with the result that the 4 cities will absorb up to $1 billion in investment between them over the next five years.

And in the final piece of news, Bloomberg reported that Abraaj is leading a group of investors who are planning to acquire as much as 35% of Barclays Africa Group, in a deal valued up to $2.6 billion. The investor group had held exclusive talks to buy the stake, but had allowed them to expire so that Barclays could sell a portion of its holding on the public markets. According to Bloomberg’s source, the investor group is still in discussions to acquire a stake.

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