Last week in brief… By acquiring Fertilizer and Inputs Holding from Louis Dreyfus Company last week, Helios Investment Partners is making one of Africa's bigger private equity deals of the year. According to The Financial Times, people familiar with the deal value the transaction at being around $200 million, split equally between debt and equity. Helios plans to provide the firm, which posts about $300 million in revenues annually, with expansion capital to help accelerate the growth of the business and build "other country multi-distribution platforms" in the agricultural sector on the continent.
Having a acquired a stake in Interswitch earlier this year, TA Associates, the Boston-headquartered private equity firm is making its second deal of the year with African connections. The firm's making what's being described as a significant strategic growth investment and backing Inspired, a global education business. Terms aren't being disclosed.
Inspired, which has an office in Johannesburg, operates the Reddam House and Reddford House groups in South Africa and Brookhouse School in Kenya. The firm has grown rapidly through a mix of acquisitions and new school development since its founding on 2013 and now operates 27 schools and 5 early learning establishments in Europe, Australia, Latin America as well as Africa.
In a smaller education deal, Verod Capital has agreed to acquire a significant minority stake in Greensprings Educational Services, a 32-year old educational service provider offering pre-primary, elementary, secondary and post-secondary schooling for both day and boarding students in Nigeria. The transaction is being made through Oreon Education, Verod's education investment vehicle backed by the private equity firm's sophomore fund, the $115 million Verod Capital Growth Fund II. The fresh capital will be used by Greensprings to restructure its capital base as well as fund planned growth initiatives.
Infinitus Holdings, a mid market-focused private equity investment company, has acquired Promeal, South Africa's second largest wet pet food manufacturer from Overberg Agri, an agricultural company based in the Western Cape. Again, terms of the deal remain undisclosed. Continuing Promeal's growth remains a key priority for the firm, which will be achieved through the expansion of current brands and the its contract manufacturing division as well as investment in new product development.
In a brief statement last week, Convergence Partners announced that it has sold its stake in Dimension Data Middle East & Africa, fully exiting its investment in the firm. The IT infrastructure and solutions provider was housed in the portfolio of the private equity firm's first fund, the R1 billion Convergence Partners Fund I. As a result of the sale, Andile Ngcaba, Convergence's founding partner, is stepping down as Executive Chairman of DiData as well as from the various group-related Boards on which he served.
Marking its second deal in Uganda, XSML Capital is backing Qualicoff, an exporter of coffee beans, in an undisclosed, long-term working capital debt financing deal. The transaction is being made through XSML's African Rivers Fund which closed with $50 million in commitments earlier this year.
Jack Ma, the founder and chairman of Chinese e-commerce giant Alibaba, announced the creation of the African Young Entrepreneurs Fund at a conference in Kigali last week. He is reportedly poised to hire staff for the planned $10 million fund, which will begin operations this year. As well as capital, Ma plans to bring 200 African business people to China to learn from Alibaba's success, hopefully leaving with practical business building skills learned from the firm's executives and operations.
And finally, according to Baker McKenzie's latest cross-border M& index, the political uncertainty roiling South Africa has had an adverse effect on inbound M&A volumes to the whole continent. The data, which covers the second quarter of this year reveals that there were 17 inbound deals for the period, a decline of 48% on the volume reported in the same period last year as well as a 45% drop from the 31 inbound deals reported in the first quarter of this year.
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.