Last week in brief...There was a healthy amount of private capital deal activity in Africa last week, both large and small. Add in a couple of significant fundraising items and portfolio company developments and we had some interesting items to chew on.
In terms of deals, the biggest came courtesy of South Africa's Public investment Corporation or PIC, manager of the governments employees pension fund assets. In partnership with Pelo Agricultural Ventures, the asset manager is taking a majority share in Karan Beef, Africa's largest beef producer, which is based in South Africa. The sellers are the firm's founding family, who set up the business in 1974 and have grown it to a significant size since.
Investec Asset Management was active once again last week, having only just backed an education business a week earlier. This time its investing additional capital in Mobisol, a pay-as-you-go solar home systems provider which it has backed on three previous occasions. This latest follow-on deal is being made on behalf of Investec's second private equity fund and is intended to support Mobisol's consumer and business-to-business expansion plans.
Another investor seemingly in active investment mode at the moment is Development Partners International or DPI. The London-based private equity fund manager is making another investment in Morocco, this time in Uniconfort Maroc Dolidol, a mattress manufacturing and distribution firm. At the end of last month, DPI invested in a Moroccan irrigation business in what was the biggest deal in North Africa so far this year. While not as large as last month's deal, the Dolidol transaction was not inconsiderable and sees DPI's second fund add a 20% stake in the firm to its portfolio.
Last week also saw an investment "first." Zoscales Partners has announced that it has made the first two deals for its maiden fund. The fund, whose primary focus is deals in Ethiopia with satellite investments in the greater East African region, has $75 million in capital which it is looking to invest in small and medium-sized businesses. The first two deals were for CGF Crown Cork Manufacturing, a leading manufacturer of metal crown cork and Ethio-Asia, a manufacturer of personal care products in Ethiopia. The financial terms of either deal were not disclosed.
Injaro Investments is making an investment in Novafrique, a soap manufacturer based in Côte d'Ivoire. The West African private equity firm is investing an undisclosed amount of growth capital into the firm which will be used to iron out some of its production bottlenecks at its manufacturing facility and scale its business further to meet the increasing demand it's experiencing for its products. The business manufactures a variety of household soap bars which are then sold to low and middle income consumers through a network of basic goods wholesalers.
On the fundraising front, Novastar Ventures announced that it had held the first close for its second venture fund ten days ago, raising $72.5 million from a group of investors who either matched or increased the level of capital commitments they made to the investor's first fund. The amount of capital confirmed for the first close represents some 60% of the total capital the fund is eventually looking to raise to invest in early and growth stage businesses in both East and Anglophone West Africa.
Staying in the realm of venture capital, Naspers announced that it will be launching Naspers Foundry in 2019, a R1.4 billion (or $96 million) start-up fund to back South Africa tech startups. The initiative will provide funding and business-building support to the country's tech entrepreneurs who are looking to grow their businesses. We con't have much more details than this at the moment, but will see how things evolve.
Two additional deal items caught our eye last week. The biggest was the deal by a group of six global investors to back Airtel Africa with $1.25 billion. Among the group were some prominent private equity and sovereign wealth investors, namely, Softbank, Warburg Pincus and Temasek. The deal provides Airtel Africa with capital to pay down debt prior to its anticipated IPO. Perhaps this latest development pushes the listing process one step further.
And Echo Service Provider, a corporate ISP in South Africa in which Ethos Private Equity holds a 31% stake, has concluded a deal to merge its ISP operations in South Africa with those operated by Gondwana International Networks or GIN. The deal, which took almost a year to close, expands Echo's operational footprint to another eight countries on the continent, with further reach being provided by GIN's partner network of thirty-five companies across the continent.
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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