On Monday mornings, Africa's private capital deal professionals read Africa Capital Digest for the deals, fund raises, people moves and more that made news in the continent's private equity, infrastructure capital and venture investment markets.
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Last week in brief... After a few relatively quiet weeks, deal making in Africa's private capital markets kicked up a notch last week. We saw a number of SME deals and a number of fund commitments, one of which was very large. It all seemed to validate the findings of SAVCA's latest private equity survey which came out last week, revealing that 2017 had been a banner year for private equity investments in South Africa, the largest for a decade.
Let's start with the deals. In West Africa, Daraju Industries landed itself a new private equity investor. Investec Asset Management had made growth equity investment in 2013 before exiting fully to the firm itself last year. The manufacturer and distributor of personal care and household products in Nigeria is now being been backed by African Capital Alliance in a deal rumored to be worth $30 million. As with many private equity deals, the capital has been earmarked to support Daraju's expansion plans.
Hopping over to the other side of the continent, Amethis Finance has led a trio of investors in a deal backing Mozambique’s Merec Industries. The Paris-headquartered private equity firm sourced the transaction and invited Kibo Capital Partners and Proparco to join the deal. Formerly just a wheat and maize miller, the family-owned firm has now evolved into a FMCG company, producing pasta, biscuit and animal feed products. The capital will be used to help it evolve further, fulfilling its ambitions to be an integrated multinational packaged food group.
TLG Capital has announced that it’s making a combined debt and equity investment in The Progeny Group, a UK-based wealth management group. The plan is to build a frontier market investment platform, with a specific focus on sub-saharan Africa, which will provide The Progeny Group’s high net worth and family office clients with access to investment opportunities in the region's financial, consumer and healthcare sectors.
South Africa's Futuregrowth Asset Management is investing equity in Symion, a South African commercial and industrial technology group, through its Development Equity Fund, an open-ended fund which mainly backs unlisted equity opportunities. The deal earns Futuregrowth a 30% stake in Symion, who will use the capital to fund its acquisition strategy.
ZOLA Electric, the former Off-Grid Electric, has secured fresh debt financing from SunFunder and a family office. The total amount of new debt, which has a tenor of 3 years, is $20 million, of which SunFunder is providing $5 million and the family office, who acted as the arranger, is contributing the remaining $15 million.
The biggest fundraising story of the week concerned the hospitality sector. Katara Hospitality and AccorHotels are launching the Kasada Fund which will invest in both greenfield and brownfield projects in the sub-saharan region as well as buy existing properties and convert them to AccorHotel branded hotels. Between them the two firms will contribute $500 million to the fund, boosting it's capacity to $1 billion through a combination of leverage and co-investments.
PAPE Fund Managers has announced the first close for its latest fund, garnering commitments from a varied group of first-time investors. PAPE Fund III has received R471 million or $35.7 million in capital from a group of investors which is approximately 40% of its final close target of $90 million. The fund will target mid-cap SME businesses operating in South Africa’s manufacturing, telecommunications, infrastructure, logistics, food security, tourism and leisure and medical sectors.
Finally, the African Development Bank has approved a €20 million commitment (or about $23.3 million) to AfricInvest's Maghreb Private Equity Fund IV. The 10-year, closed-end fund will source growth capital opportunities in small and medium-sized businesses in Tunisia, Morocco, Algeria and Egypt, backing them in exchange for substantial minority stakes.
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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