Last week in brief... We saw one of the biggest private equity deals in Africa so far this year with the news that Mediterrania Capital Partners and a group of European DFIs are backing the acquisition of MetaMed, a diagnostic imaging business, from another private equity fund managed by Gulf Capital.
The deal, which is being structured through Ray Lab, an entity owned by Mediterrania and backed by DEG, FMO, Proparco, and EBRD, is reportedly valued at more than €100 million or approximately $109 million. MetMed's network of 27 diagnostic imaging centers in the MENA region, (most of which are in Egypt), will be integrated with Mediterrania Capital III’s earliest investments, Cairo Scan Radiology and Labs, creating the largest diagnostic imaging and related services company in the region.
Staying in North Africa, Development Partners International (DPI) is backing Société Industrielle des Conserves Alimentaires (SICAM), a Tunisian tomato processor agribusiness with fresh equity, earning the private equity fund's third fund a significant minority stake. The deal is the first in Tunisia for DPI and fits squarely into the planned $800 million Africa Development Partners III’s investment strategy – to back businesses that sell their products and services to the continent’s emerging middle-class market segment. Sofiane Lahmar and Jade Del Lero Moreau led the deal for DPI. While the transaction allows the investor to nominate a member of the company’s board, who will represent them has not been disclosed yet.
Having assumed management rights to a number of The Abraaj Group’s former funds last year, Actis announced an exit from one of them, the $990 million Abraaj Africa Fund III, last week. The London-headquartered emerging markets investment specialist has sold the fund’s majority stake in GHL Bank to First National Bank Ghana, a subsidiary of the FirstRand Group. The sale is the third exit from the Abraaj Africa Funds since Actis took over management, and joins Custodian & Allied Insurance, a leading Nigerian insurance company, and Fan Milk International, a leading West Africa-focused food production company, both of which were also sold to strategic buyers.
Ethiopia saw a couple of deal announcements last week. Zoscales Partners announced the first healthcare investment for the private equity firm’s first fund last week, backing Pioneer Diagnostics Center (PDC), a diagnostic imaging service provider in Addis Ababa. A representative declined to disclose the financial details of the transaction. The deal is the fifth transaction for the $75 million Zoscales Fund I, which is now more than 60 % deployed.
Cepheus Growth Capital Partners has made the second deal for the Ethiopia-based private equity firm’s maiden fund, investing an undisclosed amount of fresh equity for a significant minority stake in East Africa Lion Brands Manufacturing Share Company (Lion Brands). Based on the outskirts of Addis Ababa, Lion Brands manufactures products for a number of consumer market sectors including the home care, personal care, and food segments. The investment capital will be used to expand the company’s manufacturing capacity, help improve its operations, and raise its ESG standards. As part of the deal, Berhane Demissie, once of Cepheus’s managing partners, joins Lion Brands’ Board of Directors.
In the agriculture sector, Goodwell Investments has led a group of investors backing a Series A round for Tomato Jos, an agro-processing business producing high-quality tomato paste for the African market. Between them, the three investors - Goodwell, Acumen Capital Partners, and VestedWorld - are investing a total of €3.9 million, (or approximately $4.25 million) in the round. Tomato Jos will use the fresh capital to support its next phase of growth which sees it move into the processing and distribution of tomato products.
In another agriculture sector deal, Anthemis Exponential Ventures has led a group of investors backing Kenya-based Apollo Agriculture’s Series A. Between them, the new and returning investors are investing $6 million in the startup which uses machine learning and automated operations technology to help small-scale farmers. Apollo will use the investment to continue to scale, partnering with more farmers, expanding its product offerings, and hiring more people for its team. So far this year, Apollo has already partnered with some 25,000 farmers, who use the company’s offering to accessing financing and insurance, farming products and advice to help them maximize their profitability.
Naspers Foundry, a start-up fund launched by Naspers in late 2018, is investing in a South African agritech business. The consumer internet group’s R1.4 billion fund is backing six-year-old Aerobotics with R100 million or approximately $5.5 million at current exchange rates. Aerobotics’ service combines drone imagery and artificial intelligence to provide farmers with the ability to detect pest and disease threats to their crops early. The subscription-based service delivers its insights online or via a mobile app, providing farmers with data on the number, size, and health of their trees and fruits, allowing for better management of their orchards. The capital will be used to support the company’s growth plans which include expanding outside its home market.
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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