Private equity exits total $1.2bn

Private equity managers (“General Partners” or GPs) have been able to exit some of their investments, spurred by good valuations, global private equity funds entering Africa and more interest from international companies. According to a story on excellent private equity website, www.privateequityafrica.com, data from research house Preqin (www.preqin.com) says that reported exits this year are worth $1.2 billion “as company values finally recover to reasonable levels despite uncertainty in the broader global economy.”
This compares with $79 million sold in the whole of 2010, according to Preqin data.
Here are some of the exits listed, plus a couple of others we added, which may not be included in Preqin’s data for various reasons. For more details take a look at www.privateequityafrica.com and other sites:
• Sweden’s Electrolux bought Egypt-based white goods manufacturing company Olympic Group Financial Invetment SAE for $404m, including a 52% stake previously owned by Egypt’s Paradise Capital Holding for Financial Investments SAE. The deal started in October 2010, and the price changed a bit during the revolution. Electrolux followed with a mandatory offer to other shareholders. A 2010 statement by Paradise Capital said the new funds would be put into other businesses: “Expanding the existing Paradise Capital business activities will help the Sallam Family realize its declared mission statement “80K by 2020” (to provide 80,000 jobs by the year 2020 in Egypt).”
• Mark Shuttleworth’s HBD Venture Capital sold its stake in South Africa-based mobile payment company Fundamo to Visa in a $110m trade deal.
• South Africa’s Ethos Private Equity Fund V sold a 70% stake in South Africa-based sporting goods company Holdsport (formerly Moresport), raising approximately $137m (R930m) through a pre-placement after a book-build by UBS. Holdsport listed on the Johannesburg securities exchange JSE Ltd in July, its first retail listing since 2004. According to reports, Ethos paid R681 million to acquire the retailer, including its debt, in a 2006 buyout with management, who retain their interest.
• Oil company Kosmos Energy Ltd raised $594m (more than expected) when it listed on New York Stock Exchange in May in an IPO, it had been backed by private equity firms Blackstone Group and Warburg Pincus.
• Aureos’ $381m Africa Fund achieved its first exit in February when it sold its stake in Nigeria-based biscuit maker Deli Foods to Tiger Brands, after holding the company for only 3 years. Tiger Brands paid a total of R275m ($35m) for the company. Aureos said it gained “solid” returns. In a press release, Ravi Sharma, partner for Aureos West Africa added: “Aureos’s involvement with Deli Foods has been about taking the company to the next stage in its development. As well as growing the company to the extent that it has been able to attract an international buyer, we are also proud that the improvements that we have made in health, safety and environmental procedures will bring significant benefits to the strong workforce, as well as the wider community in this part of Lagos.”
• Blackstar Group SE (linked to Blackstar Investors plc in UK) announced that it had reaped a 72% internal rate of return (IRR) in sterling and 4x returns on its sale of a 54% stake (shareholding and shareholder loans) in Ferro Industrial Products, after less than 3 years of holding the asset (it was acquired in January 2009 for GBP4.8m ($7.7m), according to a press release). The investor sold its stake in the company to Investec and Ferro management for R220m (about $30m at the time).
Other deals reportedly in the making include plans by Ethos and Actis to sell stakes in South Africa’s Savcio Holdings, an equipment repair company. This year’s arrival into African private equity Carlyle Group was understood to be one of the players looking at the company, estimated at $500m in value, according to reports General Electric and Siemens AG are also keen.

Look at the www.privateequityafrica.com for more and to subscribe to the October issue of the Private Equity Africa quarterly printed journal.

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