Last week in brief...While the last two weeks have seen some of Africa's larger private capital investment firms making transactions, it was the turn of the smaller funds this week. And they came from all over the continent.
We'll start in East Africa. Ascent Africa announced that it is making its eighth investment for the $80 million Ascent Rift Valley Fund. The private equity fund is backing Auto Springs East Africa, a key OEM and supplier to the region's motor industry. The investment, which is is part of debt/equity deal, gives Ascent Africa a majority stake in the company, which is being acquired from the firm's founders.
While the size of the investment was not disclosed, Ascent Rift Valley Fund's stated strategy is to invest between $2 million to $15 million in its deals. The debt component of the transaction is being provided by SFC Finance, a non-bank financial institution which provides secured medium and long-term debt financing to SMEs in Africa.
Moving south, Imara Holdings' private equity arm announced its investment in Yellowstripe Resources last week. The off-balance sheet private equity investor has been investing an undisclosed amount of fresh equity into Yellowstripe Resources, a manufacturer of steel and high chrome mill-balls located in Zambia's Copperbelt region over the last eighteen months.
The deal is the second private equity investment for Imara, which works on an investment by investment basis in partnership with a number of high net worth individuals and family offices. The Yellowstripe deals, which were led by Imara Holdings' joint CEO, Hector Fleming, gives the asset management and advisory business a majority stake in the firm.
On the South Western side of the continent, Namibian private equity fund manager Eos Capital is acquiring a stake in water management business, Heat Exchange Products. The deal, which is the fifth for the private equity firm's Allegrew Fund was led by Eos Capital's Chief Investment Officer, Ekkehard Friedrich. The private equity firm's CEO Johannes !Gawaxab will take a seat on the company's board. The financial terms of the deal, which is subject to regulatory approval, have not been disclosed.
Inspired Evolution has agreed to make an investment in Alten Africa. The deal sees Inspired Evolution's second fund, Evolution II, provide capital to help Alten Africa scale its existing solar photovoltaic platform across sub-Saharan Africa. The deal is aimed at bringing up to 500 MW of construction-ready, advanced and pre-permitted solar PV projects into operation. These include the construction-ready Hardap Project in Namibia, the Kesses 1 Project in Kenya and the Middle Band Solar One Project in Nigeria.
The Cepheus Growth Capital Fund, the maiden private equity fund for Ethiopian fund manager Cepheus Growth Capital has held its first close. The fund, which is ultimately looking to raise a total of $100 million, has landed $51 million in commitments so far from a mix of development finance institutions, family offices and high net worth individuals.
The fund's strategy is to target SME opportunities in Ethiopian manufacturing and services businesses in sectors such as fast-moving consumer goods, agriculture and agro-processing, and healthcare. Investment ticket sizes are anticipated to be in the $3 million to $12 million range in exchange for predominantly minority stakes in SMEs where they can have significant influence.
Bamboo Capital Partners and BBOXX are joining forces to launch BEAM, a private capital fund that will back distributed energy service companies or DESCOs in Africa and Asia. The fund will also work to catalyze additional capital for their targets through debt investments, joint ventures and co-investments.
Initially, BEAM will deploy $50 million in equity, starting with an investment in BBOXX and its data-driven DESCOs which provide off-grid energy to consumers in Africa and Asia. While the likely percentage of investments to be made in Africa was unclear, a company representative told Africa Capital Digest that some thirteen countries on the continent would benefit from these investments.
And finally, Proparco, the French development finance institution, has agreed to commit $5 million to TLcom's TIDE Africa Fund. The commitment forms part of the fund's $40 million in commitments which it secured in time for its first close, held last year.
TLcom is ultimately targeting $100 million for the fund, which will back businesses that leverage technology to lower the cost of services to both Africa’s enterprises and consumers alike.
As always, you can review these and other stories by clicking through to this week’s preview 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.
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