Weekly Wrap, November 19th, 2018; ECP, Actis, Goldman Sachs and others make private capital deal news last week

Last week in brief…November 19th, 2018

Emerging Capital Partners delivered one of the year’s landmarks for Africa’s private equity market last week with the news that they have held a final closefor their fourth fund. ECP Africa Fund IV now has several hundred million in hand to invest in businesses that either serve the continent’s consumers or satisfy critical needs of the continent’s firms. LPs came from across the full spectrum of institutional investors, both domestic and international, the majority of whom, some 70%, had backed ECP’s earlier funds.

On the deal front, it was a busy week in Africa. We lead with the news that Ethos and Apex Partners have announced their intention to acquire JSE-listed Torre Industries in a take private deal. Both investors feel that the underlying businesses within the Torre Group have limited synergies and require different capital structures, strategic goals and leadership in order to operate optimally and deliver improved operational performance. If it gets the necessary approvals, the investors plan to split the group in two.

Actis is teaming up with Westmont Hospitality to acquire the Four Points Sheraton on Victoria Island in Lagos. The deal is the first for a joint venture platform which plans to acquire a portfolio of hospitality assets in major cities across sub-Saharan Africa. The JV combines two key firms – Africa’s largest private equity real estate investor and on of the world’s leading private hospitaility groups – and creates an important platform for the hotel and leisure sector on the continent.

Goldman Sachs has led a group of investors backing a Series B round for UNICAF, Africa’s largest online higher education company. Between them, the group is investing $28 million in the firm, for an as yet undisclosed stake. UNICAF’s growth potential is significant. Fewer that 10% of Africa’s potential students have access to higher education, providing the company’s quality, online education solution significant upside.

TLcom is co-leading an investment in Twiga Foods, a mobile-based supply platform for retail outlets, kiosks and market stalls based in Kenya. IFC is the other co-leader of the $10 million transaction, which also had participation from the Global Agriculture and Food Security Program as well as Wamda Capital, DOB Equity, 1776 and Adolph H.Lundin, all previous investors in Twiga. The deal is the fifth overall for TLcom’s TIDE Africa Fund, which is still in fundraising mode, and has deployed less than 30% of the capital it has raised so far.

One of Gulf Capital‘s portfolio companies, Middle East Glasshas sold a 74% stake in one of its subsidiaries to Indorama Ventures, a Thailand-listed petrochemicals producer. The Egyptian glass packaging manufacturer first backed the subsidiary, Medco Plast, in 2010, and its sale to a global strategic buyer is thought to be an indication of the increasing attraction for businesses and investors of Egypt’s large consumer market and increased confidence in the broader Egyptian economy.

The Emerging Africa Infrastructure Fund is participating in a debt financing deal for the Nachtigal Hydro Power Company or NHPC in Cameroon. The Investec-managed investment vehicle is providing an 18-year, €50 million loan to NHPC as part of the overall €1.26 billion project plan which involved the construction of a run-of-the-river hydro power station on the Sanaga River. Once complete, the new hydro station will have an installed capacity of 420MW, which will add 30% to the country’s base-load electricity supply.

And finally, it was announced last week that the African Development Bank‘s Board of Directors has signed off on two fund commitments. The first actually took place in October, and sees the development finance institution investing equity in Partech Africa‘s fund, helping it get closer to its $120 million target. The second is in Africa Infrastructure Fund 3, a fund managed by Africa Infrastructure Investment Managers. The Bank had previously backed two of AIIM’s earlier funds in 1996 and 2010.

That’s it for this week. As always, you can review these and other stories by clicking through to this week’s preview edition of the newsletter.

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