Last week in brief… If you thought the week before last was a little light on the private capital deal front in Africa, think again. Last week was particularly slow, perhaps a hangover from the holiday season just ended. We'll have to wait and see whether enough momentum has built to push through some more activity in the upcoming week.
The highest profile deal of the week involved one of Africa's e-commerce darlings--Jumia--or to be more precise, the e-commerce business's owner, Africa Internet Group. Having raised about $326 million so far this year from a roster of blue chip investors that included Goldman Sachs and AXA, the Rocket Internet-backed group landed another $85 million last week, striking a deal with the corporate investment arm of mobile telco, Orange. How much equity this earned Orange was not disclosed.
In addition to the capital, the deal marks the beginning of a strategic relationship between the two organizations to help Africa Internet Group grow its portfolio of e-ventures across 12 countries in which both companies have a common presence. As well as Jumia, Africa Internet Group owns and operates a network of online and mobile startup platforms across several consumer verticals including Easy Taxi, Everjobs, HelloFood, Jovago and Zando, giving it exposure to a total of 23 African markets.
The northern part of the continent saw the only other private equity transaction of the week. In the latest deal for its €120 million second fund, Mediterrania Capital Partners is taking a 43% stake in Cieptal Cars, an Algerian provider of log-term car rental and other auto related transportation and maintenance services. The capital will be used to acquire more cars and trucks for its fleet as the company, which sells its services to corporate customers primarily in the Oil and Gas sector, looks to further diversify its business-to-business client mix as well as start offering its service outside Algeria.
A busted transaction also grabbed some attention last week, if only to officially draw a curtain across the deal. Sun International has shelved plans to acquire casino operator Peermont Group in an almost $775 million deal that was first announced in March 2015. The news was hardly surprising given the South African Competition Commission's recommendation to the Competition Tribunal that the deal be prohibited. According to the terms of the deal, regulatory approval needed to obtained by the end of March 2016.
The financial services sector provided us with a couple of interesting developments last week. Chase Bank Kenya, which counts Amethis Finance, responsAbility Participations and German development finance institution KfW among its shareholders, became the country’s third bank to go into receivership since June 2015 after it faced a liquidity crunch. The country's central bank Governor tells Bloomberg that the investors are committed to recapitalizing the bank and re-opening it as soon as possible.
As Barclays looks at divesting its African operations, Bloomberg also reported that a group of South African investors are mulling whether to acquire a 10% stake in the business. Public Investment Corporation, which manages the South African’s Government’s Employee Pension Fund, is among the members of the consortium, which, according to a source, is planning to meet with Barclays next week.
In common with other regions in the world, M&A activity in Africa and the Middle East dropped in the first quarter of 2016 according to the latest report from Mergermarket. The slowdown was particularly marked in the Africa and the Middle East region, with the number of deals falling below 100 for the first time since 2013. But while the volume of deals slipped, the total value of deals, at $8.9 billion, held steady, dropping 1.2% compared to the same period in 2015.
And finally, Alain Ebobissé, the Global Head of IFC InfraVentures, the World Bank’s Global Infrastructure Development Fund, has been appointed Chief Executive Officer of Africa50, the Pan-African infrastructure investment platform backed by the African Development Bank and twenty-two African countries with $830 million. Ebobissé has been at the IFC since 1999, where he now leads a team of highly skilled and experienced infrastructure specialists in the development of and investment in several infrastructure projects across Asia, Africa, Europe and Latin America.
Allan Cunningham is a senior media executive who has spent the last 15 years of his career working for some of the world’s most respected M&A and Private Equity media companies including Dow Jones’s publications Private Equity Analyst and VentureWire and most recently, The Deal. He has built a number of successful digital and event content businesses, both subscription and sponsor-supported, delivering information and content-marketing services to clients in the M&A and broader deal ecosystem. He recently struck out on his own and launched Rowayton Press, a multi-platform media company focused on the private capital opportunities in emerging and frontier markets. Mr. Cunningham holds a Bachelors degree from Liverpool John Moores University in the UK.