Last week in brief...After a somewhat subdued week the week before last, private capital deal and fund raising activity in Africa definitely kicked it up a notch last week. There were a number of deals across different sectors, with a couple marking "firsts" for their respective investors.
The off-grid energy sector still keeps attracting investors. African Infrastructure Investment Managers is taking a minority stake in BBOXX's operations in East Africa. The deal will help the firm accelerate its expansion in Rwanda, Kenya and the Democratic Republic of Congo. BBOXX becomes the ninth investment in AIIF 3's portfolio, and Ashwin West, who led the deal, and colleagues Romain Py and John Kimotho all take seats on BBOXX's board.
In another off-grid solar deal, SunFunder announced the close of a multi-currency debt facility on behalf of SolarWorks! which was arranged with currency hedging company MFX Solutions last week. The fresh financing will be used by the firm for working capital purposes and help the business push growth rapidly in Mozambique. SolarWorks! has been active there since 2011.
West Africa saw a flurry of activity. TLG Capital announced it is making its first investment in Francophone West Africa. The London-headquartered investment firm has bought pharmaceutical company Cipla's distribution and marketing business in the region for certain therapy areas. It's the investment firm's seventh deal of the past twelve months, capping off TLG's most active year ever.
AFIG Funds has agreed to buy the stakes of some of NEM Insurance's existing shareholders, making them the Nigerian insurance group's largest shareholder. The transaction is being made on behalf of AFIG Fund II, which, according to the private equity firm's website, is targeting $250 million to invest in businesses that exhibit the potential to become regional "blue chips" in West, Central and East Africa. Typical investment ticket sizes for the sector-agnostic fund, which held its first close in July 2016, range between $5 million and $20 million.
Vectis Capital has agreed a restructuring investment in Leventis Foods, a branded foods and snacks manufacturer in Nigeria. The deal, which is subject to regulatory approval, sees the private equity firm invest $12 million in the firm, which is a subsidiary of conglomerate A.G. Leventis. If approved by regulators, Vectis will end up with a majority stake in the business. The deal will boost Leventis Foods' financial position, allowing it to expand its portfolio of products, its distribution networks as well as its manufacturing and logistics infrastructure and capabilities.
In a fundraising first, Lagos-based CardinalStone Capital Advisors announced the first close for their maiden third-party fund last week. The 10-year fund has raised $50 million of the $100 million it is eventually looking for from a group of investors which include Kuramo Capital, CDC, FMO and the Nigerian Sovereign Investment Authority. The fund will back small and medium enterprises in Nigeria and Ghana, putting between $5 million and $15 million of equity to work in companies in a number of sectors.
Staying in Lagos, Syntaxis Capital Africa announced the launch of a new SME private equity fund. The Syntaxis Nigeria Growth Fund is aiming to raise about $33 million at current exchange rates to back small and medium enterprises across several sectors and has already received commitments from some of Nigeria's largest pension funds and private investors. Syntaxis expects to complete fundraising by the end of the first quarter this year.
Helios Towers is making its first investment in South Africa with the acquisition of a stake in SA Towers. The private equity-backed company has agreed to buy a controlling interest in the South African tower company in order to accelerate its expansion into South Africa. The company's strong relationships with all of South Africa's Mobile Network Operators as well as its pipeline of potential tower sites located in over 500 urban locations across the country were all attractive criteria. Helios Towers will provide management assistance and expertise in building out and expanding this pipeline of towers, which are now either ready to be built or in the process of qualifying for the necessary permits.
Trinitas Private Equity and Agile Capital have agreed to buy two subsidiaries, Everite and Sky Sands, from struggling listed South African construction firm Group Five. The two private equity firms are paying R480 million, or almost $35 million for the two units, in a deal which is expected to close early in the second half of this year.
That's it for this week. As always, you can review these and other stories by clicking through to this week's preview edition of the newsletter
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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