Last week in brief... Four of South Africa's more significant private capital investment firms made deal and fundraising news last week. As part of its strategy to realize the value of its assets, Braithas sold its majority interest in Iceland Foods, a British supermarket chain, to an entity owned by Malcolm Walker, the firm’s original founder, and Tarsem Dhaliwal, the firm’s CEO. The sale of the 63.1% stake earns Brait £115 million (or $144 million), which is a significant premium to Brait’s carrying book value of £62.5 million for the business as at the end of March. Brait will use the proceeds of the sale to repay a revolving credit facility.
We also saw the launch of a few funds last week that will invest in opportunities to help businesses weather the economic fallout of the Covid-19 crisis. The largest of them is being sponsored by Ninety One, the former Investec Asset Management, in partnership with Ethos Private Equity. The SA Recovery Fund, as it is known, is aiming to raise a total of R10 billion, which is almost $600 million at current exchange rates, initially from institutional investors in South Africa and anticipates holding two fundraising closes. The goal is to build a mixed portfolio of assets made up of an appropriate level of senior and subordinated debt, preferred equity, listed and private equity investments over an aggressive investment time horizon of 18 to 36 months.
Sanlam Investmentsannounced the launch and seeding of three impact funds - two debt funds and one largely focused on private equity opportunities. The financial services firm is investing a total of R2.25 billion or approximately $130 million to seed the three funds which, collectively, make up what Sanlam calls the Investor's Legacy range of funds. All three funds are looking to mobilize additional capital and aim to make investments that preserve existing jobs as well as encourage the creation of new jobs across companies of all sizes.
In other fundraising news, the IFC has signed off on a $30 million equity investment in AfricInvest's latest pan-African fund, AfricInvest IV. The fund's investment team will be sourcing growth capital investment opportunities in midcap companies across Africa, prioritizing those businesses which are both well-positioned in their own markets and have the potential to expand into new markets and evolve into regional champions. IFC has backed a number of AfricInvest-sponsored funds in the past, including AfricInvest IV's two immediate predecessors, AfricInvest II and AfricInvest III.
Turaco, a platform company owned by 54 Capital consisting of a portfolio of Ethiopian FMCG assets is being backed in a mezzanine deal by Ethos Mezzanine Partners and Proparco, the French DFI. Between them, the two organizations are investing $22 million in the business which manufactures and sells edible sunflower and soya oil under the brand name Tena, as well as soaps and detergents and personal care products under the brand names 555 and Aura. Turaco will use the capital to fund the expansion of its manufacturing operations in Ethiopia. Growing demand for its brands in Ethiopia is fueling the need to increase its production capacity and broaden the range of products it currently offers in the market.
African Frontier Capital has struck a receivables financing deal with d.light, providing the pay-as-you-go solar business's Kenyan subsidiary with access to as much as $65 million in local currency. The funding is being structured through Brighter Life Kenya 1, a Jersey-registered, off-balance sheet financing platform recently established by the two organizations and will be used to free up working capital and support the d.light subsidiary's ongoing growth.
In another solar deal, ARCH Emerging Markets Partners is backing Sun Exchangethrough the African Renewable Power Fund. The fund is investing $3 million of the $4.2 million raised by the solar leasing platform for its Series A round. As part of the deal, ARCH takes two seats on Sun Exchange's board and will be represented by William Barry, the investment firm's managing director, and Zahid Ahmed Hassen, a director in ARCH's Nairobi office who led the deal for the firm.
Having backed Tempo Housing Nigeriawith a mix of debt and equity in 2018, Àrgentil Capital Partners is back again, investing additional debt and equity in the Nigerian housing developer and restructuring its holding in the business. The debt portion of the investment will be used to fund Tempo Housing's working capital requirements, helping the firm complete some on-going projects in its home market of Nigeria. In addition, Àrgentil is also converting some existing loan notes into equity, increasing the stake held by Àrgentil Principal Investment Portfolio II's (APIP II), the fund which first backed the business two years ago to more than 20%.
In people news, having been appointed CEO of Dutch development bank FMO in 2018, Peter van Mierlo has announced that he is stepping down. No-one has been appointed to succeed him at the moment, and FMO's supervisory board is beginning the process of finding his replacement.
And finally this week, a former risk management consultant who has worked at KPMG and Control Risks in the past has joined CDC to head the UK's development finance institution's business integrity unit. In her new role, Alexandra Maddy will head up a department of more than 17 people working with CDC's portfolio of investments to improve their corporate governance and business integrity functions by, among other things, adopting internationally recognized standards.
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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