Last week in brief…June 22nd, 2015
Having hired Frederick Antwi from Goldman Sachs at the end of last year to determine and define the Africa investment opportunity for them, last week TPG announced a $1 billion partnership with Satya Capital, Sudanese billionaire Mo Ibrahim’s investment firm. Satya-TPG, the partnership’s special purpose vehicle, will target deals in healthcare, TMT, consumer and financial services sectors on the continent, ranging up to $400 million in size. Instead of raising a new fund, the capital required for the African investments will be deployed from TPG Growth, the private equity firm’s $7 billion dollar middle market and growth equity platform.
In other deal news, Atlas Mara, the financial services investment group founded by former Barclays CEO Bob Diamond and Mara Group’s Ashish Thakkar, sold its 10% stake in Zimbabwean private equity and advisory firm, Brainworks Capital, to an unnamed acquirer, netting almost $9 million in the process. Atlas Mara came to own the stake through its acquisition last year of ADC Financial Services. Disposing the stake is in line with their strategy of divesting non-core assets in order to focus on building banking operations on the continent.
Phatisa’s African Agriculture Fund participated alongside the UK’s development finance institution, CDC, in a $9 million private placement offering from TSX-listedFeronia, Inc, an agribusiness company with operations in the Democratic Republic of Congo. The proceeds of the offering will be used to provide its palm oil business with a mix of working and expansion capital. Feronia originally acquired the palm oil business, Plantations et Huileries du Congo, from Unilever in 2009, following years of under investment and interruption to its operations caused by conflict in the country.
A number items relating to several private equity-backed portfolio companies made the news last week. Bain Capital‘s Edcon faces a $28 million interest payment at the end of June, and while it has the cash to pay the coupon, it would be left severely stretched. Sources tell Reuters that the impending interest payment will kick start the debt restructuring process for the South African retailer. In other retail sector news, Brait‘s CEO John Gnodde tells Business Day that the investment firm will look to exit its stake in Steinhoff International which it owns as part of the sale of Pepkor to Steinhoff a few months ago. The proceeds would be use to fund future acquistions. And South Africa’s Competition Commission approved Libstar‘s acquisition of Natural Herbs and Spices without conditions. The Abraaj Group acquired a a majority stake in Libstar in October 2014, the deal being the first investment for Abraaj’s third dedicated sub-Saharan fund, which held its final close at $990 million in April this year.
And finally, an inaugural report from KPMG and industry association EAVCA on private equity trends in East Africa was published last week. It has some useful data points and observations on the volume, value and pace of dealmaking in the region over the past seven years.
As always, you can review these and other stories by clicking through to this week’s complete issue of Africa Capital Digest.