Last week in brief...The biggest private capital-related deal of the past week in Africa came courtesy of Japanese trading and investment behemoth Mitsui & Co. The company has agreed to spend $265 million to take a 30% stake in ETG, an agricultural-commodity supply chain by acquiring secondary shares from ETG's founders as well as the Pembani Remgro Infrastructure Fund and Standard Chartered Private Equity, giving the latter a full exit from an investment it first made in 2012.
Investec Asset Management was also involved in an exit deal last week. The South African private equity investor has sold its stake in Ashwah Holdings, parent company to Daraju Industries, back to the company, again for a full exit. The divestment marks the third exit for Investec's first private equity fund, the $155 million Africa Frontier Private Equity Fund I, which originally acquired the 35% stake in Ashwah Holdings in 2013.
XSML Capital's $50 million African Rivers Fund has made its fifth investment in Uganda, backing Ecopharm, a pharmacy chain with eight branches in the East African country's capital city, Kampala. The company serves affluent customers with a broad range of branded, generic and locally produced pharmaceutical products, as well as a range of over-the-counter medicines and personal care products. The fresh capital will be used support Ecopharm's expansion plans to open outlets in new neighborhoods.
On the western side of the continent, Àrgentil Capital Management is backing a subsidiary of Nigerian media and entertainment company Chocolate City Group with a combination of equity and debt. The deal, which is being done via Àrgentil Principal Investment Portfolio II, is earning the investor a 49% stake in Chocolate City Lounge, a restaurant and lounge chain delivering customers an experience that combines dining, music from award winning artists and entertainment. The business, which will be rebranded CCX, plans to expand across Nigeria, opening a number of new locations over the next five years.
South Africa's largest mezzanine fund manager, Vantage Capital, is providing $12.5 million of funding to Purple Capital, a specialist real estate and financial services investment firm in Nigeria. Most of the funding has been earmarked for working capital and enhancements for the Maryland Mall, a major development of the firm's, with the remaining portion being used to support a new upmarket residential development. Maryland Mall attracts over 35,000 visitors every week, and is home to a number of leading multinational and local brands.
The African Development Bank's Board of Directors approved commitment to two funds last week. In the first, Africa Capitalworks will receive $15 million for its planned $300 million raise. The new long-term investment vehicle was launched by Capitalworks earlier this year and has already received support from CDC and Public Investment Corporation, the manager of South Africa's Government Employees Pension Fund.
In the second, the Bank joins a significant roster of development finance institutions backing Phatisa's second food fund. The 10-year fund will receive an additional $10 million towards its $300 million target and has also been backed by OPIC, the French Development Agency, the International Fund for Agricultural Development and the Spanish Agency for International Cooperation and Development.
Last week saw the publication of the results of Deloitte's 2017 Africa Private Equity Confidence Survey which found reasons for optimism. Despite the oil price slump from 2014 and the continued slow down in real GDP growth between 2015 and 2016 across the continent, the survey found that investor sentiment and confidence is returning and is largely positive.
And finally, Quartz Africa published an interesting profile of a Ghana-based startup that received $6.6 million for its Series A round from a group of international investors. mPharma is disrupting Africa's pharmacy retail supply chain and is setting its sights on bigger targets beyond the continent. Silicon Valley stalwarts are watching with interest.
As always, you can review these and other stories by clicking through to this week’s preview 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.