Last week in brief...Two technology transactions led the charge of deals in Africa last week. Both were notable for their size as well as the investors involved. Of the two, let's start with the one which we suspect was the larger, even though the amount of capital invested was not disclosed. Berkshire Partners, a Boston-based private equity firm is buying a stake in Teraco Data Services, the continent's biggest data centre services company which is primarily owned by European private equity giant Permira.
In November last year, sources told Bloomberg that a sale of the whole company could fetch as much as $600 million to $1 billion including debt. Berkshire, which typically invests up to $500 million in its portfolio companies, now holds a majority stake in Teraco, with Permira are keeping a significant share of the company.
The other tech deal involves Andela. The 4-year old startup has raked in $100 million for its Series D round from a group of investors. Generation Investment Management, the firm co-founded by former US Vice President Al Gore, led the round, which also saw participation from a number of Andela’s existing investors. The funds are being used to support Andela's ongoing expansion. So far, Andela has raised $180 million over its four investment rounds.
Of a smaller order of magnitude, Goodwell Investments is backing Kenya’s Copia, an online shopping service that serves base of the pyramid consumers, particularly in rural areas. The impact investor’s uMunthu Fund is investing $2 million in the e-commerce company, for an undisclosed stake, in a deal led Joel Wanjohi and Goodwell’s East Africa team based in Nairobi. Founded in 2013, Copia has grown rapidly and still has significant upside potential in Africa and eventually, in other emerging markets. From having 20 agents at launch, the company now has a network of more than 3,000 people, serves 40,000 customers with 80,000 orders each month.
Staying in Kenya, Adenia Partners has acquired a controlling stake in Kenyan retailer Tumaini Self Service. Announced last week, the deal was in fact completed in early December through Sokoni Retail Kenya, a special purpose vehicle set up by the private equity investor in August last year. As part of the deal, Adenia will be able to nominate three of the non-executive directors who’ll sit on Tumaini’s 5-person board.
Tumaini will use the capital primarily to push its expansion plans. The 13-year old business operates a network of nine supermarkets currently, six of which are in Nairobi with another three in Kisumu. Opening new stores as well as improving the products available to its customers are both key components of the growth plan.
We cover two North African deals this week - one equity and the other debt. CDG Capital Private Equity has agreed to make an equity investment in Laboratoires Steripharma, a Moroccan pharmaceutical business. The deal, which is the fourth for CDG’s Capmezzanine II SCR fund, sees the private equity investor acquire the stakes held by several of Steripharma’s minority shareholders for an undisclosed amount. Brahim Guessous, the Partner who led the deal for CDG, takes a seat on the company’s board as part of the transaction.
In a debt deal, Gulf Capital is making its first investment in Tunisia. The UAE-based alternative investment firm is backing CHO Company, a Tunisian headquartered producer and exporter of olive oil, on behalf of its second private debt fund, the $251 million Gulf Capital Credit Opportunities Fund II. CHO will use the fresh funds for working capital purposes as well as to support the company's expansion and integration plans. In addition to running its own olive orchards, the firm also acquires fruits from other farmers which are then turned into over 10 million gallons of first cold press extra virgin olive oil at its olive oil milling operation in Sfax.
On the fundraising front, Zebu Investment Partners announced that it has held an initial close for its sophomore fund. The private equity fund manager has raised a total of $84 million for its new fund, the Africa Food Security Fund, from a mix of DFIs, pensions funds and a fund-of funds. The fund does not have much more left to raise given that its ultimate target is to reach $100 million by final close, leading Brian Frimpong, Zebu's Managing Partner, to say that he expects the fund to certainly beat its target. The fund will back SMEs across sub-Saharan Africa which operate across the food value chain.
CrossBoundary announced the launch of, and initial commitments for, a new mini-grid project financing facility last week. The investment and advisory group has established CrossBoundary Energy Access, a first for the continent, as a blended finance fund which will make either equity or debt investments in private sector mini-girds which find it a struggle to attract needed funds. The Rockefeller Foundation and Ceniarth have committed funds to the vehicle which is looking to initially invest $16 million in mini-grids serving people in homes and small businesses. Once the model is proven, CrossBoundary will look to scale up the facility to between $50 million and $100 million in size.
The African Development Bank's Board of Directors has approved an equity commitment to the ARCH Africa Renewable Power Fund or ARPF. The fund, which is being sponsored by ARCH Emerging Market Partners, a joint venture between African Rainbow Capital and US-based impact investor, JCH & Partners, will get $25 million from AfDB to help it towards its first close which is expected to take place in the first quarter of this year. Ultimately, the fund is looking to raise $250 million which will be used to back hydro, wind, geothermal, solar, stranded gas and biomass projects across Sub-Saharan Africa.
And finally, Renaissance Capital has a new investment banking head for Africa. The emerging markets investment bank has tapped Risana Zitha to be both the Chairman of the Board if Directors for its South African entity as well as the Head of its Investment Banking business in Africa.
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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