Last week in brief…Sector-wise, deal activity in Africa last week was all over the map. Consumer, Financial Services, Industrial, Mobile, Tech and others all saw some activity and they ranged in size.
We lead with Convergence Partners' deal for ESET Southern Africa. The ICT-focused private equity firm announced it is taking a significant minority stake in the software security provider on behalf of Convergence Partners I, their first fund. The transaction is expected to support ESET's push into the enterprise segment in the region as well as growth in several East African markets following Convergence Partners' recent acquisition of a stake in ESRO, the ESET distributor in that region.
Kibo Capital is making its first investment in Mozambique, backing consumer product distributor Tropigalia to take a minority stake in the business.The deal is the fifth for Kibo's second fund, which closed with $63 million in commitments in 2016. Tropigalia has operations in Mozambique's three main cities - Maputo, Beira and Nampula - distributing food and non-food FMCG products for leading brands such as Colgate-Palmolive, Pioneer Foods and others. The fresh capital will be used to support the firm's efforts to capture new exclusive distribution agreements with more global brands and add to the more that 3,000 product items it currently offers.
XSML Capital's African Rivers Fund is making its fourth investment in Uganda. The $50 million fund, which held its final close in May this year, is backing Telcare Ltd, which operates 39 kiosks and 4 shops Kampala under the Go-Phones brand. The capital will be used to support the company's expansion plans in the East African country. The company, which was started in 2005, provides its customers with mobile money transfer services using the MTN Uganda and Airtel networks as well as selling mobile associated ancillary products and services such as handsets and airtime.
DiGAME Investment Company is taking a stake in South African asset manager, 10X Investments. The subsidiary of London-based Zouk Capital is investing alongside Old Mutual Private Equity, already an existing stake holder in the tech-enabled financial services company, in a deal totaling $6.14 million. The fresh capital will be used to expand 10X Investments' retail offering further as well as explore international expansion opportunities.
South African impact investment manager Secha Capital announced that it has agreed to invest in Geestep, a footwear company. The value of the investment remains undisclosed, but Secha Capital typically takes minority stakes in its investments, spending up to R5 million. The deal is the third for Secha Capital VCC, the firm's 12J investment vehicle launched in partnership with Caleo Capital in May this year.
Frontier Digital Ventures has acquired three online property classifieds portals from Jumia which compete with its portfolio companies in Ghana, Nigeria and Angola. The deal, which sees Frontier exchange Afribaba, its listings portal for francophone Africa, and $500,000 in cash for the three assets, will create three market leaders as Frontier merges all traffic, listings, agents, advertisers and revenues from these businesses with its existing portals meQasa in Ghana, ToLet in Nigeria and AngoCasa in Angola.
There were a couple of portfolio company-related deal items this week. Kutana Steel, a wholly owned subsidiary of investment company Kutana Group, is acquiring Saint Gobain Pipelines from industrial giant, Compagnie de Saint Gobain. Terms of the deal, which was led by Kutana's Chief Investment Officer, Anthony Barnard and Investment Principal Claire du Bourg, were not disclosed.
And Capitalworks has completed the deal to acquire insurance giant Aon’s shareholding in 10 employee benefit, insurance and reinsurance brokerage operations in several sub-Saharan African countries. The deal which was originally announced in February, has now received the necessary regulatory approvals in the markets in which the business operates, and the new group has been renamed branded Minet.
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.