Last week in brief… Small and impactful is the moniker that could be applied to the private capital deals in Africa last week. There were none of the high-profile, big name private equity transactions that we've seen over the past couple of week, but the impact investment category was well-represented.
At the end of the week, Injaro Investments announced that it has sold its 30% stake in Nafaso to the company’s management. Injaro first backed the Burkina Faso-based seed producer in 2013, since when both the company's revenues and production capacity have tripled and it has penetrated other markets in the broader West African region. That performance should point to a decent return for Injaro's $49 million agricultural impact fund, although the terms of the deal were not disclosed.
Heading East to Uganda, TLG Capital is backing BAJ Stations with $5 million in debt via its credit opportunities fund. The deal, which is the seventh investment for the open-ended Credit Opportunities Fund, is structured as a 5-year trade with equity kickers. Up until this point, BAJ, which has been built up by CEO Norman Batuma, who was originally a Shell franchisee until he acquired Shell’s Uganda business in 2002, has not taken on any debt. The debt will be used to expand BAJ's network across the country.
Stimulus, the private equity investment vehicle managed by Namibian investment management firm Pointbreak, is backing Khomas Solar Saver. Financial terms of the deal, which sees the $35 million investment vehicle take a $67.6% stake in the rooftop solar photovoltaic systems provider, were not disclosed. The capital is will be used to strengthen Khomas Solar’s balance sheet, positioning it well to take advantage of the opportunities in the sector that are being driven by the need for corporations to reduce the size of their carbon footprints.
The IFC is investing $2 million in equity into Caisse Régionale de Refinancement Hypothécaire, the West African Economic and Monetary Union’s regional mortgage refinancing company. It’s estimated that the West African Economic and Monetary Union zone faces a housing shortage of 3.5 million units. As forecasts of population growth of between 2.5-3.5 percent start to impact the region, the housing deficit could widen. With this support, the IFC hopes to contribute to helping fill the housing gap by enabling access to housing finance, promoting reforms and developing local expertise.
The Twinsaver Group, the Ethos Private Equity-backed tissue manufacturer, has acquired Validus Medical, a manufacturer of hygienic disposable products. The undisclosed deal is expected to close once the requisite regulatory and competitive approvals have been received. Twinsaver emerged from Ethos’s $144 million deal to acquire a significant portion of Nampak’s South African corrugated paper, sacks and tissue divisions closed in April 2015. The Validus Medical deal helps Twinsaver further diversify its FMCG product offering.
There were no major fundraising announcements this week. However, on the development finance institution front, Rob Davies, South Africa’s Minister for Trade and Industry, has announced that the country’s National Empowerment Fund is to become a full subsidiary of the Industrial Development Corporation to help meet the demand for funding from black entrepreneurs. The South African Government has identified both the IDC and the NEF as central in implementing radical economic transformation and development policies, particularly in light of renewed efforts to develop black industrialists.
Finally, a couple of corporate and personnel news items were reported. Firstly, DOB Equity is opening a new, larger office in Kenya’s capital, Nairobi, and expanding its team of investment professionals. The move is part of the Dutch Family Office’s plan to support its strong growth trajectory by boosting its local presence and its ability to add value to companies in the region, having doubled its impact investment portfolio in both 2015 and 2016.
And secondly, Tanya van Lill has been appointed to lead the Southern Africa Venture Capital and Private Equity Association, better known as SAVCA. She takes over from Erika van der Merwe, the high-profile Chief Executive Officer of the industry association, who is stepping down in order to relocate with her family to the Netherlands.
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.