Last week in brief… Some of the bigger names in Africa's private capital investment ecosystem and their portfolio companies featured strongly in news from the continent last week. But despite that, it was a week of measured rather than manic activity, even if some of the numbers tended to the higher end of the scale.
Let's start with the one and only fundraising item of the week. While the capital is not earmarked for Africa, it's an African private equity firm who is sponsoring it. For their third International Fund-of-Funds, Old Mutual Alternative Investments is looking to raise $300 million. It already has $250 million in hand and has backed 5 funds in North America and Europe so far. The fund's preferred commitments range from $15 million to $25 million in size in private equity managers who look for growth capital or special situations opportunities in mid-to-large sized businesses across several sectors. Targeted returns for the new fund were not available, but the first fund-of-funds reported an IRR of 11.1% net of costs as at the end of September while their second is doing somewhat better, currently delivering a 16% IRR, again net of costs.
Investec Asset Management and RMB Ventures have announced the completion of their acquisition of Botswanan retailer and consumer goods company Kamoso. While the financial details of the transaction were not disclosed, it's thought the deal is the Southern African country's largest ever private equity investment. Kamoso is a roll up of 10 companies who supply supermarket chain Choppies, as well as other retailers, which was bought in 2015 by a consortium led by Standard Chartered Private Equityand Development Capital Partners in a deal reportedly worth $45 million.
TPG Growth has led a Series A2 round investment in Gro Intelligence, a New York and Nairobi-based agricultural data analytics business. The investment was sourced via TPG's strategic relationship with EchoVC and is the second deal this year that's come about as a result of the relationship between the two investment firms. In May this year, they both took part in a $22 million deal for Nigeria's Frontier Cars Group.
Africa50 has signed long-term financing agreements with Scatec Solar and Norfund to develop utility scale photovoltaic power plants in Egypt. The African Development Bank-backed infrastructure fund is contributing equity in exchange for a 25% stake in the project, as part of an almost $450 million funding package. The deal is the first early stage investment for the fund.
In portfolio company-related deals, Abraaj-backed Libstar has had its deal to acquire Sonnendal Dairies approved by South Africa's Competition Commission. Yoghurt producer Sonnendal Dairies joins a portfolio of 28 fast moving consumer goods companies operated by Johannesburg-headquartered Libstar throughout South Africa. The group, which generates in excess of R7 billion (about $495 million) in revenues annually, sells to the foods service industry and the private label segments of larger retailers. In July this year, Bloomberg quoted sources as saying that Abraaj was evaluating the possibility of an IPO for Libstar, which could value the firm as much as $1 billion.
Another story about a potential IPO has been making the rounds. According to Dow Jones, Vivo Energy Investments, a large licensee of Royal Dutch Shell's fuels and lubricants in Africa owned by Vitol and private equity firm Helios Investment Partners is said to be working with several investment banks who would potentially underwrite the offer, which could value the company in excess of $3 billion.
Sun Exchange, a solar cell marketplace based in South Africa, has raised $1.6 million from a group of South African and American investors. Through Sun Exchange's solar marketplace, investors can buy solar cells which are then leased to businesses, hospitals, factories and other end users in power-hungry parts of the world. The company arranges solar equipment leases for investors and handles revenue collection and distribution systems enabling passive streams of rental income. The block chain-based platform gives retail and institutional investors worldwide access to solar panel ownership, whilst giving businesses and communities in emerging markets the ability to purchase renewable power that both reduces costs and drives sustainable development.
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.