The week in brief…November 24th, 2004
In the biggest reported deal of the week, Ethos Private Equity has agreed to write a $144 million cheque to acquire diversified packaging company Nampak’s Tissue, Corrugated and Sacks divisions in South Africa. According to Business Day the disposal of these “underperforming” assets makes strategic sense for the company and quotes an analyst as saying that Ethos seems to have picked up the divisions for a price that is 20% lower than the net asset value of the businesses.
Meanwhile, Kenya saw some headline-grabbing private equity activity last week with two deals. In the first, LeapFrog Investments has sealed an $18.7 million deal to acquire a majority stake in Resolution Insurance. The investment is being made from LeapFrog’s second fund which closed at $400 million a couple of months ago. Kenya’s non-life insurance market is growing at 20% a year, so the deal gives the fund exceptional exposure to this growth. In the second Kenyan deal of the week, Fusion Capital spent $2.2 million to bump up its stake in Xtra Publishing to 57.6%. The company published XNews, the free evening paper launched in March this year, now boasting a daily distribution of 30,000 print copies.
Abraaj Investment Management’s bid to acquire a majority stake in Egyptian snack maker Bisco Misr seemed to have reached its conclusion last week when it announced it had received approval to acquire 100% of the company for $118 million. But by the week’s end, reports started to emerge that US cereal maker Kellogg’s had jumped into the fray, offering $127 million for the company. We’ll have to see how things play out, but as we go to press, the Kellogg’s bid is being scrutinized by the relevant authorities and Abraaj has not publicly reacted.
On the fundraising front, things were very quiet last week. Nigeria announced the launch of a $50 million venture capital fund to support the launch and expansion of small and medium enterprises in the country. Details on who will manage the fund have not, as yet, been revealed. On the debt front, meanwhile, reports are circulating that Kenya plans to raise an additional $750 million for development projects by expanding the sovereign bond issue it held in June.
And finally, perspective on the investment opportunities in Angola from Teodoro Poulson, a member of the investment committee of FACRA, the government-backed venture capital fund. He delivers great insight on the investing landscape in Angola, the opportunities he sees and the government’s initiatives to boost investment in the country.
You can review these and other stories by clicking through to the week’s full issue of Africa Capital Digest.