Last week in brief… When we look back at the end of the year, we could see that deal activity in Africa's private capital markets last week was the sleepiest we saw all year. Transactions were few and far between, and all over the map, value-wise. And fund commitments and closings were pretty much non-existent. But, notable, the biggest deal of the week was also the first in Africa for its investor.
The deal was in the mining sector, and the first-time investor has its HQ in Australia. EMR Capital, a private equity fund manager with about $2 billion in assets, agreed to buy stakes in Zambia's Lubambe Copper Mine belonging to African Rainbow Minerals and Vale International. The Australian private equity firm will pay a total of $97.1 million in cash for their combined 80% stake and will assume the Zambian copper mine's loan liabilities.
In another transaction in the southern part of the continent, Sanlam Investments has agreed to acquire a 30% stake in EasyEquities from Purple Group. The all-cash deal is reportedly worth R100 million, or approximately $7.6 million.
Launched in October 2014, EasyEquities has grown rapidly, prompting it to look for additional funding from a strategic partner with deep enough pockets to support the growth and development of the fintech company's platform over the next two to three years. To date the company has been financed out of the earnings of other Purple Group businesses as well as a few small capital raisings.
Next up, a debt deal, albeit a very small one. Social impact investor AgDevCo is backing Talian, a Ugandan milling business, with $450,000 of debt. The financing will help Talian's plans to scale up its operations. Until now, the company, which has ambitions of becoming a significant operator in the maize and cassava flour markets in East and Central Africa, has struggled to access capital and consequently has been unable to fully utilise its production capacity.
At the other end of the value scale, GFH, a leading financial investment group based in Bahrain, has completed the acquisition of a $1.2 billion portfolio of infrastructure assets in Africa and the Middle East. Details of the assets, their sellers and the financial terms agreed were not disclosed.
The deal has been funded by a $315 million capital increase, which lifts publicly-listed GFH's issued and paid up capital to $975 million. In addition, the transaction launches an infrastructure investment business line for the group, which currently operates in the private equity and asset management, commercial banking and real estate sectors.
There were a couple of interesting items in online publication How We Made It In Africalast week. In the first, Robert MacPherson of the NTU-SBF Centre of African Studies and Zubaidah Jalil of the National University of Singapore review the evolving investment relationship between the Gulf and Africa. And in the second, Justin Probyn looks at how the continent's youthful population, under-resourced public education systems and mismatch of skills and employer needs has created fertile terrain for Africa's private education investors.
Finally, the latest South African private equity performance report from Riscura and SAVCA was published last week. The data reveal the results delivered by a representative basket of the country's private equity funds for the quarter ending March 31st this year. While public markets hit record highs for the period, private equity returns for the quarter dipped in the face of economic and political headwinds.
As always, you can review these and other stories by clicking through to this week’s complete issue of Africa Capital Digest.
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.