Archive for the 'Private Equity' Category

Private Equity Africa awards 2015

Congratulations to the winners of the 2015 Private Equity Africa Awards! These celebrate the achievements of Africa’s top General Partners (GPs) and advisors in 2014. The awards are in their 4th year and were handed out at a gala dinner at London’s Grosvenor House Hotel on 29 April.

Outstanding leadership award: Runa Alam, Chief Executive Officer, Development Partners International
This accolade is awarded based on voting by leading industry investors.

House of the year
Sub-Saharan House of the Year: Carlyle Africa
Award collected by Marlon Chigwende, Managing Director and head of Africa team at Carlyle.

Special recognition: General Partners
North Africa Investor: Abraaj
Award collected by Lloyd West, Director at Abraaj.

Fundraiser of the Year: Carlyle
Award collected by Marlon Chigwende, Managing Director and head of the Africa team at Carlyle.

Outstanding First-Time GP: Amethis Finance
Award collected by Luc Rigouzzo, Managing Director at Amethis.

Outstanding South Africa Exits: Capitalworks
Award collected by Chad Smart, Partner at Capitalworks.

Frontier Investor: XSML
Award collected by Marcel Posthuma, Managing Partner at XSML.

Exit of the year:
Mansard Insurance by Development Partners International & AfricInvest
Award collected by Idris Mohammed, Partner at Development Partners International, and Hakim Khelifa, Senior Partner and Co-Head of Sub-Saharan Africa at AfricInvest.

Deal of the year
Large-cap deal of the year: Helios Towers Africa by Helios
Award collected by Henry Obi, Partner at Helios.

Mid-cap deal of the year: J&J Africa by Carlyle
Award collected by Marlon Chigwende, Managing Director and head of the Africa team at Carlyle.

Small-cap deal of the year: Moablaou by Databank
Award collected by Brian Frimpong, Managing Partner at Databank.

Portfolio company of the year
Development impact: Emerging Capital Partners & Investec Asset Management for IHS
Award collected by Hurley Doddy co-CEO at ECP, and Mark Jennings, Investment Principal at Investec Asset Management.

Innovation: Helios for Interswitch
Award collected by Pierre Heinrichs, Principal at Helios.

Improvement & social impact: Adenia Partners for Newpack
Award collected by Antoine Delaporte Managing Director at Adenia Partners.

Special recognition: deals & exits
The event also recognized investors and advisors that had delivered exceptional transactions during 2014 that do not fall into the main award categories.

Landmark deal: IHS by Emerging Capital Partners
Award collected by Hurley Doddy, co-CEO at Emerging Capital Partners.

Small-cap exit: African Frontier Capital for Electro-MaxxUganda
Award collected by Roland Tatnall, Managing Partner at African Frontier Capital Partners.

Debt deal: TLG Capital for GetBucks
Award collected by Dominic Clive, Principal at TLG Capital.

Frontier deal – Côte d’Ivoire: Cauris Management for Cipharm
Award collected by Jean-Marc Savi de Tové, Partner at Cauris.

Advisors of the year
Overall legal advisor: Clifford Chance
Award collected by Spencer Baylin, Partner at Clifford Chance.

Funds legal advisor: Webber Wentzel
Award collected by Markjan van Schaardenburgh, Partner at Webber Wentzel.

Deals legal advisor: Clifford Chance
Award collected by Spencer Baylin, Partner at Clifford Chance.

Fund administration: Trident Fund Services
Award collected by Karine Seguin, Business Development Director at Trident, and Rajan Rosick, Head of New Business at Trident.

Corporate finance advisor: Intercontinental Trust
Award collected by Noelle McKean, Senior Vice President at Intercontinental Trust.

Single-deal advisor:: Dentons for IHS
Award collected by Nicholas Plant, Partner and Head of Private Equity, UK and Africa, at Dentons.

The final award winners were selected by an independent panel of judges:
• Alex Wolf, Vice President, HarbourVest Partners
• Arjette van den Berg, Independent Private Equity Advisor
• Arnaud de Cremiers, Partner, Adam Street Partners
• Charles Rose, Chairman, Hainsford
• Dushy Sivanithy, Principal, Pantheon Ventures
• Hervé Schricke, Chairman, Xange/AFIC Africa
• Jean-Luc Koffi Vovor, Founder, Kusuntu
• Matthew Craig-Greene, Founder, Craig-Greene & Co
• Michelle Essomé, Chief Executive Officer, AVCA
• Rory Ord, Head of RisCura Fundamentals, RisCura
• Vivina Berla, Senior Partner, Sarona Asset Management

Advisors
Mark Artivor, Independent Private Equity Advisor
Thomas Ferede, Independent Private Equity Advisor

Insights of private equity in Ethiopia – Schulze Global Investments

Schulze Global Investments is the longest-established private equity firm in Ethiopia. It is run by a family office and is extremely well networked. It has made several deals, but apparently no exits yet although prospects are improving.
SGI Ethiopia has also not been much in the media. In this interview, Dinfin Mulupi of HowWeMadeItinAfrica.com interviews Blen Abebe, vice president at SGI Ethiopia, who highlights the importance of a local team for successful private equity. For the full story, have a look at the original interview here.

Blen Abebe (photo reprinted from HowWeMadeItinAfrica)

Blen Abebe (photo reprinted from HowWeMadeItinAfrica)

So how has SGI been able to navigate this unique environment?

At Schulze Global, most staff are Ethiopian-Americans and the fact that you look Ethiopian and speak the native language ensures the locals can relate to us. For example, we have closed deals partly because we were on the ground and could relate better to locals than other private equity firms. And it makes sense, because most family businesses have been passed down through generations so they wouldn’t necessarily trust, or be willing to work with, you before they get to know you. That is why Schulze Global ensures it has people who know both the foreign and local culture.

What are some of the challenges SGI faces in Ethiopia?

Well, being the first one on the ground can have both positive and negative effects. For example, when Schulze Global opened its office back in 2008 most people had never heard of private equity. So we literally had to go through a teaching process of what it was we are doing. And to add to that, most companies confuse us with a bank so we must almost always explain the difference between a private equity firm and a bank.

After they understand the private equity structure, then the next challenge is agreeing to the terms that are in the term sheet.

Do you see in the future any likelihood of an exit?
We haven’t done any exits yet, but the future looks positive as we are seeing many entrants into the market. Therefore an exit via a strategic buyer should be attainable.

With more private equity funds coming in, how will things play out?
Competition is definitely increasing. We see it already. In fact, in one deal we are currently looking at, the sponsor is telling us they are also being courted by another fund. But our strength has always been that we have been in Ethiopia the longest, so we know what works and what doesn’t. And that long presence, even a small thing like knowing where our office is and the fact that they can visit us anytime, gives the local sponsors comfort – and at the same time gives us some leverage compared with other funds using the “fly-in and fly-out” model.

What are Africa’s pension funds investing into?

Do you agree or disagree with this view? Comments are welcome below

Pension funds in 10 African countries already have $379 billion in assets under management – 85% or $322bn of it based in South Africa – and they continue to grow very fast. That means careful thinking about how to nurture Africa’s savings pool while the need to deploy these resources most productively puts the spotlight on the search for quality investment assets.

For example, Ghana’s pension fund industry reached $2.6bn by Dec 2013 after growing 400% from 2008 to 2014. Nigeria’s industry has tripled in the last 5 years to some $25bn in assets by De 2013, and assets under management are growing at 30% a year. There are 6 million contributors, but many more Nigerians still to sign up pensions.

Pensions have a special place in the capital market as they take a longer-term view and can be patient in the hope of greater returns. Some pension funds, in Africa and elsewhere, argue that pensioners are not just looking at the value of their retirement income but also the quality of their lives, opening the way to carefully chosen investments in infrastructure, healthcare and other benefits which pensioners and their families might enjoy.

What are the African factors driving the growth of pension funds?
• Many countries have set up new regulators and even more are introducing regulations, including forcing more employers to provide pensions. With the new regulatory frameworks come structural changes such as the need for professional third party asset managers
• Changing demographics: The age group over 60 years is the most rapidly increasing, according to some research
• It’s a virtuous circle, many Africans want savings opportunities. If pension funds produce results, and are well run and good at communicating, people will respond.

The growth is only beginning. So far only 5%-10% of the population in sub-Saharan Africa are thought to be covered by pension funds and 80% in North Africa. Pension funds are still tiny in comparison to gross domestic product (GDP), which in turn is growing fast in many African countries – for example pension funds are about 5% of GDP in Nigeria, compared to 170% of GDP in Netherlands, 131% in UK and 113% in America.

Southern Africa is generally better served: Namibia has some $10bn in pension assets representing 80% of GDP and Botswana $6bn or 42% of GDP. The biggest pension schemes are usually government and social-security funds as well as local government and parastatal funds (such as Eskom in South Africa), as well as those of big corporations and multinationals.

Economist Charles Robertson of Renaissance Capital says conservatively that pension funds in the 6 largest sub-Saharan African markets will grow to $622bn in assets by 2020 and to $7.3 trillion by 2050.

What to invest in?

The challenge is how to invest the capital productively. Are Africa’s entrepreneurs, corporate finance and investment banking houses and capital markets rising to the challenge of bringing a a strong pipeline of investment-ready projects to keep up demand for capital?

Capital markets need to offer liquidity and transparency both to channel the foreign capital looking for African growth opportunities for their portfolios and now for domestic funds too. Liquidity can be a key problem, even in Africa’s world-beating Johannesburg Stock Exchange, where the Government Employees Pension Fund (GEPF) is thought to account for 13% of market capitalization and to be the country’s biggest investor in commercial property.

Big funds in small other Southern African capital market swamps can be like hungry hippos, snapping up promising new investments as they surface. Even if they feel satisfied from a good run of success on some of these investments, they can hardly disgorge them back into the liquidity pool for other traders because of the gnawing fear they would not find other local investments to fill their bulging portfolios.

Others share the worry. Eyamba Nzekwu of Nigeria’s Pencom was reported as saying: “Savings are growing much faster than products are being brought to the market to absorb these funds”. Pension fund growth is thought to have contributed to a 79% surge in Ghana stock market in 2013 as funds chased too few investments.

Regulators should encourage the fund-managers to upgrade skills fast to be more proactive in picking and trading stocks and African fixed income. They should also widen the space in the interests of helping the markets and the funds to grow through liquidity. This means, for instance instance, urgently relooking restrictions on cross-border investments, including into other African markets.

Private equity and infrastructure

The pension funds provide a huge opportunity for alternative assets, especially private equity. According to research by the African Development Bank’s Making Finance Work for Africa and the Commonwealth Secretariat, African pension funds are estimated to have invested some $3.8bn-$5.7bn in private equity and to have scope to invest another $29bn (see table below). Many countries are passing new regulations to allow investment into private equity and other unlisted investments. Funds have been experimenting – sometimes disastrously – with small and medium enterprise and other developmental investments.

table50313_pensions

International private equity fund managers such as Helios and LeapFrog have also seen the future, making investment in pension fund providers – Helios took equity in Nigeria’s ARM Pension Fund Managers and LeapFrog into Ghana’s Petra Trust.

Africa has huge need for infrastructure finance and pension funds could be the ideal pool of patient capital but more work needs to be done to increase the supply of investable projects and to increase capacity of pension funds to invest in projects directly or through infrastructure fund managers.

Savings are good for growth, provided there are productive assets for them to go into. Africa’s savings are rising, often driven by regulation, and international interest has been strong for years. Can Africa’s entrepreneurs, their advisors, private equity funds and the capital markets institutions rise to the challenge of building a big enough pipeline of great investment opportunities suited to the needs of these investors?

For more reading:
This article is heavily based on work by: Ashiagbor, David, Nadiya Satyamurthy, Mike Casey and Joevas Asare (2014). “Pension Funds and Private Equity: Unlocking Africa’s Potential”. Making Finance Work for Africa, Emerging Markets Private Equity Association. London. Commonwealth Secretariat. Available through MFW4A.
Another book is by Robertson, Charles (2012). “The Fastest Billion: The Story Behind Africa’s Economic Revolution”. Renaissance Capital. Read more here or buy it on Amazon (link brings revenue to this site).
Other articles are at The Economist on Nigeria’s pensions, African Business and Wall Street Journal.

Private Equity Africa ranks top 10 deals in 2014

Leading website and magazine Private Equity Africa lists the top 10 Africa private equity deals from 2014. They use data from Preqin.

1. Helios Investment Partners – Helios Towers Africa – $630m
This is the second year that Helios Investment Partners took the top slot when it led a consortium to inject $630m of growth capital into telecommunications service provider Helios Towers Africa (HTA) in July. It was US-based private equity investor Providence Equity Partners’ first deal in Africa. The IFC’s African, Latin American and Caribbean Fund also invested for the first time in HTA. Existing investors Quantum Strategic Partners, Albright Capital Management and RIT Capital Partners also backed the tranche. (Helios’ big deal in 2013 was to partner with BTG Pactual and Indorama to bring $1.5bn investment into Nigeria-based oil and gas exploration company, Petrobras Africa.)

2. Emerging Capital Partners leads consortium – IHS – $490m
Emerging Capital Partners (ECP) led the consortium that invested $490m in Nigeria-based telecommunications towers company IHS. The latest 2014 funding round brought in Goldman Sachs was a new investor and the IFC Global Infrastructure Fund and African Infrastructure Investment Managers (AIIM) were also in. IHS is part-owned by Investec Asset Management, the first private equity investor to fund its expansion. Other existing investors are ECP, Wendel, sovereign wealth fund Korea Investment Corporation (KIC) and the Netherlands Development Finance Company (FMO). KIC first backed IHS when it joined Investec and ECP in a $1bn financing round in 2013. Standard Chartered Bank contributed $70m in senior debt specifically set apart to finance expansion into Zambia as part of the capital package

3. Abraaj – Liberty Star – confidential
South Africa’s Liberty Star Consumer Holdings (Libstar) manufacture and distributes food. It sells private-label products to retailers, own-brand products and third-party packaging and ingredients to the food industry. Abraaj acquired a majority stake in the company through a secondary buyout from Metier, Old Mutual Private Equity, Development Partners International and Lereko – which have all exited the company. Libstar management took a minority stake in the buyout. The deal value is confidential.

4. Atlas Merchant Capital – Union Bank of Nigeria – $270m
The investment was channelled through Atlas Mara Co-Nvest, its $325m investment vehicle listed on the London Stock Exchange. Atlas Merchant previously held 9.05% in Union Bank, inherited when it took over ADC African Development Corporation in early 2014. It committed the capital by exercising an option to acquire 20.89% of the financial services company.

5. IFC-Asset Management Compan & Temasek – Seven Energy – $255m
More sovereign wealth fund action in April, when Singapore’s Temasek partners with IFC Asset Management Company (IFC-AMC) to invest $255m in Nigeria’s Seven Energy, an oil and gas exploration and production company. Temasek contributed $150m for a 25% stake. Previous investors in Seven Energy include Actis, Investec Asset Management, Africa Finance Corporation, Capital International Private Equity and Standard Chartered Private Equity. Seven Energy’s $600m capital-raising round included $335m in debt of which the IFC African, Latin American, and Caribbean Fund contributed $30m.

6. Kohlberg Kravis Roberts – Afriflora – $200m
KKR’s first deal for Africa, in July, was approximately $200m in Afriflora, an Ethiopia-focused agriculture production company that cultivates, produces and sells roses based on Fairtrade standards. The company operates as Sher Ethiopia. The investment is part of KKR’s $6.2bn European Fund III.

7. Carlyle – Tiger Automotive – confidential
It was fast-moving Carlyle’s third deal of the year from its maiden $698m Africa-focused fund, closed earlier in 2014. It bought South Africa’s vehicle accessories distributor Tiger Automotive (TiAuto) in November. It partnered with Old Mutual Private Equity (OMPE) to buy the company from Ethos Private Equity. TiAuto operates through 7 divisions, including Tiger Wheel & Tyre, Tyres & More, YSA and Treads Unlimited and primarily distributes branded tyres such as Continental, Yokohama, Michelin, Pirelli, Goodyear, Achilles, GT Radial and Hankook.

8. Stanchart – Sphinx Glass – $180m
Standard Chartered Private Equity backed a deal and partnered with Saudi Arabia’s Construction Products Holding to buy Egypt-based industrial production company Sphinx Glass from Qalaa Holdings (formerly Citadel Capital) in May for $180m. Sphinx Glass operates under license from US-based PPG Industries, a specialist float glass technology provider. Qalaa sold it as part of a strategy to shed non-core assets.

9. Rocket & Kinnevik – Jumia – $148m
Hotshot tech investors Rocket Internet and Kinnevik put another $148m into their consumer shopping platform Jumia in December. US-based private equity investor Summit Partners owns part of Jumia and JP Morgan Asset Management has also previously invested. Jumia owns consumer shopping websites offering branded consumer products as Internet shopping starts to take Africa by storm. Rocket Internet has previously backed Groupon, eBay, Facebook, LinkedIn and Zynga. Watch this space.

10. Carlyle Diamond Bank – $147m
Carlyle’s fourth deal was into Nigeria-based financial services company Diamond Bank, which is a Tier II bank, covering corporate, retail and public sector banking with subsidiaries offering custodian, mortgage, securities and insurance products and services. Kunoch Holdings, the Africa-focused investment platform of entrepreneur and investor Pascal Dozie, raised its holding in the bank from 5.86% to 20.65% in August, buying the additional stake from Actis and CDC Group.

*Rankings based on Preqin data and Private Equity Africa research.

“Africa’s largest” Helios III private equity fund to close at $1.1bn

Leading African private investment firm Helios Investment Partners says it is about to close its 3rd Africa-focused private equity fund at the $1.1 billion limit. The firm said yesterday (12 Jan) it had already passed its $1bn target. Helios Investors III L.P. fund will “acquire and build market-leading, diversified platform companies, operating in the core economic sectors of the key African countries, with an emphasis on portfolio operations as a creator of value”, according to a press release.

The company says Africa’s attraction to investors stems from growth driven by factors specific to the continent, including economic liberalization, technology driving increasing productivity, demographic dynamics and urbanization. The Financial Times describes it as “the first $1bn-plus Africa-focused private equity fund.”

Tope Lawani, co-founder and Managing Partner of Helios Investment Partners, commented in the press release: “Much has been made of the rise of the African consumer, and that does, from time to time, give rise to potential investment opportunities. However, as discretionary incomes remain low and the cost of basic goods and services is high, Helios believes that addressing the supply side of the economy is generally more attractive.

“Helios’ strategy focuses on investing in businesses that lead the provision of core economic infrastructure: de-bottlenecking the economy; increasing efficiencies; and reducing living costs for households and operating costs for businesses.”

Economic woes bring buying opportunities
According to the Financial Times, many countries’ economic prospects are troubled by falling commodity prices. Increased interest rates in US cause capital flows out of developing markets. In an interview Mr Lawani told the paper that in the near term many African countries were going to suffer an “adverse impact” on their currencies as capital flew back to the US: “We are witnessing sharply lower commodities prices and it is reasonable to expect African currencies to lose value against the dollar,” he said.

He claimed that the downturn would turn into an opportunity for investors holding large amounts of US dollars, such as Helios. “It is an excellent time to invest: asset values are going to come down.”

From Helios Investment Partners website

From Helios Investment Partners website

Investor appetite matures
The company says that over 60% of the new capital committed comes from their existing investors, and other leading global institutional investors have joined them. The investor base for Helios III includes sovereign wealth funds (SWF), corporate and public pension funds, endowments and foundations, funds of funds, family offices and development finance institutions across the US, Europe, Asia and Africa.

Helios investment team is supported by Helios’ dedicated Portfolio Operations Group, based in Lagos and Nairobi, who work in active partnership with portfolio company management to create value within the firm’s portfolio by driving operational improvements. Helios has already made one investment through Helios III, acquiring an interest in ARM Pensions, Nigeria’s largest independent pension fund manager with over $2.2bn of pension assets under management. It has built a robust pipeline of proprietary opportunities.

Dabney Tonelli, Investor Relations Partner of Helios Investment Partners, commented: “Achieving, and exceeding, our fundraising target for Helios III underscores the global demand for experienced, institutional, Africa-focused private equity specialists and the strength of the relationships we have built with the world’s leading private equity investors.”

Helios was established in 2004 by Nigerian-born Tope Lawani and Babatunde Soyoye. It raised the previous record for Africa’s biggest private equity fund at $908m in 2011. Through various investment types, such as business formations, business formations, growth equity investments, structured investments in listed entities and large scale leveraged acquisitions across Africa, it has aggregated more than $2.7bn in cpapital commitments, according to its website.

The Financial Times adds: “Africa still attracts a tiny proportion of the world’s private equity money, even compared with other emerging regions, notably Asia and Latin America. But interest has increased recently, buoyed by strong economic growth. After stagnating for two decades, African gross domestic product per capita has surged almost 40% since 2002, fuelled by high commodity prices, the rise of a small consumer class, and cheap Chinese loans.”

Africa deals
It says that buyout groups raised $3.3bn for Africa funds in 2013, down from a peak of $4.7bn in 2007.

The FT points to US buyout private equity firms Carlyle’s $698m fund and regional deals by KKR (which invested $200m in a Afriflora, an Ethiopian exporter of roses, in June 2014 from its $6bn European fund according to this Wall Street Journal story and a KKR press release) and Blackstone. In June 2014 Edmond de Rothschild amassed $530m for its first private equity fund focusing on deals in Africa, managed by Amethis, majority-owned by the Swiss private banking group and founded by Luc Rigouzzo and Laurent Demey, two former top executives at French development financial institution Proparco. There has also been increased multinational deal-making, including French insurer Axa entering Nigeria, an alliance between SAB Miller and Coca Cola, and a merger in South Africa’s retail sector.

Top private equity conference bring industry leaders together

[Sponsored] The leading African private equity conference returns this December, bringing together more than 500 equity professionals, 150 of the most powerful private-equity practitioners and 130 top industry speakers under African sunshine. SuperReturn Africa is billed as “the largest meeting place for the African and global private equity limited and global partner communities”.

The fifth edition of this giant annual conference will be at The Westin, Cape Town, from 3-4 Dec, preceded by fundraising and West Africa summits on 2 Dec. AfricanCapitalMarketsNews is privileged to offer our readers a 10% discount on tickets, see the VIP Code and link below.

Top ten SuperReturn Africa 2014 conference themes:
1. How large funds source deals and find competitive prices
2. Which routes are most attractive to gain exposure to Africa
3. How the most successful general partners (GPs) prepare portfolio companies for exits
4. What drives limited partner (LP) decisions
5. How savvy managers are tapping into booming African retail markets
6. What do trade buyers look for in firms that are backed by private equity
7. The role of private equity in funding Africa’s infrastructure deficit
8. How is African private equity performing in comparison to other emerging markets
9. How deep are African commercial and residential real-estate markets
10. How far is Africa from forming its own silicon valley?

Sector specializations giving a change to hear from expert GPs with expertise in retail and African consumers, agribusiness and food, healthcare and education, investing in small and medium enterprises (SMEs), environmental, social and corporate governance (ESG) as a commercial tool, the role of mezzanine finance and “how to” guide to successful exits. Many top international, South African and African private equity funds are sharing tips and experiences.

A conference highlight is guest keynote speakers:
• Behavioural neuroscientist Dr John Coates, a research fellow in neuroscience and finance and a former derivatives trader, sharing his research on “the biology of exuberance and pessimism – the challenge for risk management”
• Leading economist Goolam Ballim, Chief Economist and Head: Standard Bank Research, sharing his expert views on macroeconomic trends across Africa and how the continent achieved sustained, rapid growth rates for 15 years
• Ground-breaking academic Ludovic Phalippou, Associate Professor at Saïd Business School, Oxford, presenting his research on whether the rise of secondary buyouts is good news for investors
• South African financier Colin Coleman, managing director and head, investment banking division, sub-Saharan Africa, at Goldman Sachs, on how South Africa is positioning itself in the global and pan-African economies.

Another SuperReturn Africa 2014 highlight is “too hot to touch” closed-door sessions, carried out under Chatham House rules (no attribution) to aid free and frank discussions. The 3 sessions cover fund-raising horror stories and tricks of the trade; doing business in West Africa; and building an ideal skill set for a private equity team.

The fund-raising summit on 2 Dec includes themes such as: Who is investing in African private equity funds, how many funds are there and how much do they hope to raise in 2015, which LPs are committing to first close and what incentives work, how managers can improve their chances to raise a first-time fund and why it is so hard raise fund II.

The West Africa private-equity summit highlights savvy investor skills for deploying capital and exiting in Nigeria, is francophone Africa missing out, Ghana uncertainties, regulations around domestic African funds investing in private equity and harnessing opportunities on Nigeria’s power privatization.

The conference is an essential part of doing business in African private equity. Pension funds, endowments, foundations, sovereign wealth funds, development finance organizations, family office and members of the International Limited Partners Association (ILPA) get free LP pass, subject to validation. There is a 40% discount for African companies from selected African countries.

Everyone else can claim a 10% discount, courtesy of AfricanCapitalMarketsNews when you quote VIP code: FKR2356ACMBL. For more details or to register, please visit: www.superreturnafrica.com/FKR2356ACMBL, email: info@icbi.co.uk or call: +44 (0) 20 7017 7200.

Abraaj makes its first private-equity exit in Angola

Leading private-equity investor The Abraaj Group (www.abraaj.com) has exited its investment in Fibrex (www.fibrex.co.ao), its first exit in Angola. The announcement today (4 Aug) did not give details of the price or the buyer
Fibrex manufactures high-density polyethylene (HDPE) and other low-pressure plastic pipe products used in the construction industry. Abraaj invested through one of its funds in 2007 and has given operational support and since then, production volume has grown by 70%. Abraaj has supported upgrading the energy-supply infrastructure, improved governance, accounting and reporting standards, and increased environmental efficiency at Fibrex.
When Fibrex started in 1966, it was making woven bags to transport agricultural materials and fertilizers. It evolved into products such as PVC and HDPE pipes for the construction industry and it became the first company in Angola devoted to manufacturing plastic pipes and fittings. It has grown since into the domestic market leader.
In 2010 Fibrex secured ISO 9001 certification for quality management. The production facilities were further upgraded to recycle by-products of production, including plastic sawdust and fragments, and to reduce noise.

Credit: http://luanda.all.biz

Credit: http://luanda.all.biz


Abraaj’s also worked with Fibrex and Angola’s labour and trade unions to offer counselling, testing and adequate medical care to employees for HIV treatment.
The announcement quotes Davinder Sikand, Partner and Head of Sub-Saharan Africa at The Abraaj Group: “At Abraaj we have an unrivaled history of pioneering the private equity industry in Africa, where our strong on-the-ground teams penetrate relatively untapped markets and gain access to opportunities that often pass under the radar of investors that are not as well entrenched in these markets.
“We initiated our investment in Fibrex based on Angola’s strong macroeconomic conditions. The country, focused on rehabilitating its national infrastructure, showed rapid GDP growth and demonstrated significant demand for quality construction-related material and products which has helped Fibrex attain a market leading position in the country.”
Sandeep Khanna, Managing Director at The Abraaj Group: “Fibrex was not only well positioned to capitalize on the wide-scale infrastructure development of Angola, but also presented impressive growth rates sustained by its ability to retain its market-leading position despite increasing competition from new foreign entrants.
“Fibrex remains in a strong position today to capture the continued growth of the construction industry, as Angolans and the African continent more broadly seek to address their infrastructure needs. This successful experience in Angola has strengthened our confidence in the country’s investment opportunities, increased our appetite for Angolan businesses, and boosted our search for local partner companies.”
The Abraaj Group currently manages USD $7.5 billion across more than 20 sector and country-specific funds, encompassing private equity and real estate investments. Funds managed by the Group currently have holdings in over 140 partner companies across 10 sectors including consumer, energy, financials, healthcare and utilities. It operates in the growth markets of Africa, Latin America, the Middle East, South Asia, South East Asia, Turkey and Central Asia and employs over 300 people across over 25 offices in 6 regions, including hubs in Istanbul, Mexico City, Dubai, Mumbai, Nairobi and Singapore.
It has been investing in Africa for the past 29 years, deploying $2.6bn across 80 investments.

Top legal conference focuses on Africa infrastructure and natural resources deals

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The International Financial Law Review conference is on 20 May at The Waldorf in central London. The 2012 and 2013 events each attracted over 250 participants and very positive feedback. Meet senior in-house counsel, heads of emerging markets and senior partners to maintain a strategic focus on African deals and new financial regulations. Attendees will include top banks, regulators and corporates from UK, Europe and Africa.

Benefits of attending:
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• Practical tips for mitigating risks in African infrastructure (includes rail, road and airports)
• Focus on oil and gas, including contracts, balancing government interests and profits, and update on the Nigerian Petroleum Industry Bill
• Debate private equity and M&A opportunities in Africa
• Hear about local capital markets providing domestic options
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Tunis Stock Exchange IPO is largest listing

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The listing of Société d’Articles Hygiéniques (SAH), on the Tunis Stock Exchange yesterday (9 Jan) after a private placement and an oversubscribed initial public offer (IPO) is the largest listing on the Tunis bourse (Bourse de Tunis), with the company valued at TND 270.5 million ($163.5m). It is a successful exit for leading African private equity firm Emerging Capital Partners which scored a cash multiple of 2.4x on exiting the investment.

The private placement for 90% of the shares attracted 85 local and international investors, signalling a return by international investors to the Tunisian capital market. The public offer in the Tunisian IPO was over-subscribed 22.1 times, according to a press release. Adel Grar, Chairman of the Tunisian Brokerage House Association, said: “The IPO of SAH is a milestone.. it demonstrates the ability for a local or foreign investor to exit through the Tunis Stock Exchange.”

SAH (www.lilasbebe.com.tn) is Tunisia’s leading manufacturer of feminine and baby hygiene products and operates under the “Lilas” brand. ECP has invested since 2008 and, according to the announcement, “has supported SAH as it increased its customer base to 17 countries across North and sub-Saharan Africa, created subsidiaries in Algeria and Libya, and developed a paper mill factory in Tunisia.” Products include baby diapers, feminine-care pads, disposable diapers, bathroom and facial tissues, kitchen towels, hand towels and tissue wipes.

“Over the last 2 years, SAH has grown at 17% per year, despite a difficult economic climate – testament to its focus on product innovation, diversification and locally produced, high quality offerings. SAH’s sales are expected to exceed TND 200m ($120m) in 2013 and the company currently employs over 2,000 people.” According to a 2011 profile in The Africa Report, also on the ECP website , SAH was founded in 1995 by wife and husband team Jalila Mezni and Mounir el Jaiez.

The sale was of 14,176,590 shares, representing 48.99% of the capital at listing and the fixed offer price of TND 9.35 per share.

Nayel Georges Vidal, Director in the Tunis office at ECP, said in the press release: “Under the guidance of Ms Jalila Mezni, the company has worked hard to more than double its performance over the last 5 years. With ECP’s support, SAH has expanded its production capacity, brought new products to market, expanded beyond Tunisia, and built a strong customer brand – all made possible by its employees’ dedication to improving its systems, governance and product range. We firmly believe that SAH will continue to create further value for its shareholders – which include many foreign investors showing renewed interest in the Tunisian stock market.”

Private equity firm ECP was founded in 2000 and has raised more than US$2bn for growth capital investing in Africa. It was one of the first firms dedicated to Africa and has investments in more than 50 African companies through 7 funds. It boasts “more people on the ground than any other firm” with more than 70% of its investment professionals, who hail from 12 African countries, in 7 local offices.

Its private equity investments include financial services, telecommunications, retail and consumer, natural resources, agriculture and infrastructure in over 40 African countries. In 2013 Africa AM magazine was awarded ECP as “PE Fund of the Year”. Private Equity Africa awarded it for mid-cap “PE Deal of the Year” as reported here, for investment in casual dining chain, Nairobi Java House.

Citadel Capital to issue $528m shares

Shareholders of leading investment company Citadel Capital have voted recently to allow the company, which says it has $9.5 billion in investments under control, to boost capital by EGP 3.64 billion ($528 million). According to a press release, it is part of “the firm’s transformation from the largest private equity firm in Africa into the leading investment company in the region.”
Citadel is listed CCAP.CA on the Egyptian Exchange. Shareholders voted at an extraordinary general meeting (EGM) in Cairo on 20 October. The shares will be issued at par value (EGP 5) and would boost capital from EGP 4.36 bn to EGP 8.0 bn. Shareholders will participate in the share issuance on a pro-rata basis.
Citadel Capital says it will use the capital to reach majority ownership in most of its platform companies, in particular the firm’s subsidiaries in its five core industries: energy, transportation, agrifoods, mining and cement. It plans to exit non-core investments over the coming few years as it transforms its business model to become an investment company.
Citadel Capital Chairman and Founder Ahmed Heikal said in a press release: “Approval to launch the capital increase signals clear shareholder confidence in our transformation into an investment company. The long-term holding periods permitted by the new model will allow Citadel Capital to maximize value creation through a balanced portfolio that includes a healthy mix of both assets that provide stable dividend streams and that are cash generative, and others that are in high-growth phases.”