Last week in brief… Deals in Africa tended to be on the small size last week. The agribusiness and power sectors saw most of the activity, although there were a couple of interesting financial services sector items of interest.
Sanlam Private Equity announced that it is acquiring a 60% interest in JAB Dried Fruit Products, a processor and distributor of dried fruits and nuts for markets in South Africa and overseas. A family-owned business, JAB was founded in 1979, and processes a broad range of fruits sourced from across South Africa at its 17,000 square metre processing facility in Nelspruit, Mpumalanga. Terms of the deal were not disclosed.
Another agribusiness deal and another 60% stake also made the news last week. LGC Capital, a Canadian investor, in partnership with AfriAg, a South African specialist agribusiness, have agreed to acquire a 60% stake in House of Hemp in a deal valued at approximately $4.1 million. The deal forms part of LGC's Medical Cannabis initiative, a 50/50 joint venture with AfriAg to develop a fully-regulated cannabis growing and processing industry in the southern African region for export to certified and regulated end users world-wide.
In a renewable energy debt deal, Emerging Africa Infrastructure Partners and Dutch DFI FMO are jointly lending $29.3 million of senior debt to the 13MW Bugoye hydro-electric power plant, situated in Western Uganda, which is owned by the Africa Renewable Energy Fund (AREF), Berkeley Energy's $200 million fund. The proceeds of the refinancing will be used to repay the balance of EAIF's original loan to the project as well as construction loans made by AREF. In addition, some of the capital will be used to fund repair works for the power plant, which has been producing electricity for Uganda's national grid since 2008.
The European Investment Bank is evaluating the possibility of making a commitment to Denham Capital's International Power Fund which targets opportunities in energy and renewable energy generation projects in Africa, South East Asia and Latin America. As yet, the size of the potential commitment remains undisclosed. The Denham International Power Fund's strategy will be to invest in projects via five to eight platforms, backing experienced project developers and management teams who have strong knowledge of the markets in which they operate.
In what looks like significant competition for Atlas Mara and Arise, Milost Global, a private equity firm based in New York announced the launch of Milost Bank Africa Ltd, or MBAL, a new financial services company which will seek buyout opportunities in the banking industry on the continent. The firm seems to have a significant war chest, with more than $25 billion in committed capital, primarily for buyouts, but also for alternative capital, mezzanine finance and alternative lending solutions to companies across a wide range of industry sectors around the world.
As part of its strategy to expand its asset management business, EFG Hermes, the Egyptian investment bank, is paying $21.5 million for a 50% stake in Frontier Investment Management Partners or FIM Partners, a Dubai-registered asset manager with $1.6 billion in assets. The deal, which is being executed via the investment bank's subsidiary EFG Hermes UAE Ltd., raises the value of EFG's public and private market assets under management to $4.5 billion. In order to realize some of the synergies promised by the deal, EFG plans seek client consent over the next six months to roll over its regional, non-Egyptian, portfolio and funds into FIM Partners.
And finally, in some people move news, Phatisa announced last week that it is promoting Rinolan Moodley to the position of Deal Partner with the firm. Moodley, who joined Phatisa in September 2013, was previously a Senior Deal Principal focused on deals in the food and agribusiness sectors. In his new role, he'll lead a team sourcing and executing new transactions for Phatisa Food Fund II, a planned $300 million fund which will target opportunities in the food and fast moving consumer goods value chain in sub-Saharan Africa.
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.
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