Weekly Investment Wrap (August 15th): Old Mutual, NSIA, Rockwood and others

Asoko Insight
15 August 2016

Deal activity in Africa’s private equity and infrastructure investment markets revved up last week. There were two particularly notable announcements – a pair of fund launches and a high-yielding exit – as well as number of other interesting, if smaller, deals that took place.

Old Mutual Inv. Group and NSIA

On the fund raising front, South Africa’s Old Mutual Investment Group has signed a couple of agreements with the Nigerian Sovereign Investment Authority to raise a total of $700 million. The capital will be invested in the country’s real estate and agriculture sectors. They aim to raise $500 million for a real estate fund and $200 million for an agricultural fund and, to get things going, its expected that the partners will seed both funds to start.

Rockwood, Thebe Inv. Corp., Safripol and KAP Industrial

The high-yielding exit benefited an investor consortium made up of Rockwood Private Equity, Thebe Investment Corporation and the portfolio company’s management team who agreed to sell Safripol, a South African polypropylene manufacturer, to KAP Industrial Holdings for $310 million. The investment consortium first backed Safripol in 2006 by purchasing the company from Dow Chemicals and have, according to the press release, enjoyed “well above average private equity returns” from the sale.

Network International and IFC

Continuing in the private equity sector, Network International, one of the largest merchant acquirers and issuer processors in the Middle East and North Africa may soon be the beneficiary of a $30 million equity investment by the IFC. The company, in which U.S. private equity firms Warburg Pincus and General Atlantic have significant stakes, provides electronic payment services to over 130 banks, 35,000 retailers, governments and consumer finance institutions in 45 countries in the Middle East and Africa. The fresh capital would be used to help fund Network International’s strategic growth plans across Africa and the Middle East. Emerging Africa Infrastructure Fund is contributing $20 million to a $105 million syndicated loan for Helios Towers Africa to help finance the purchase of approximately 950 telecommunications towers in the Democratic Republic of Congo. No word yet on who the other institutions taking part in this debt deal are, but the transaction marks the fifth occasion on which the two organizations have worked together.

Royal Bafokeng and Aveng Capital

In a second infrastructure-related deal for the week, Royal Bafokeng Holdings announced that it is spending approximately $64 million dollars to acquire a number of energy and infrastructure assets from Aveng Capital. It’s all part of the community-based investment firm’s bid to diversify its exposure to assets that will enhance a predictable and sustainable long-term dividend profile.

Aveng, Steeledale, Stellar Capital, and AEC

There were a couple of private equity deals in the $20 million range last week. Aveng Capital featured again, this time in a sale of 70% of Steeledale, its steel reinforcing and mesh business, to Kutuna Group for $19 million. And Stellar Capital Partners is offering shareholders around $20 million to take JSE-listed Amalgamated Electronic Corporation private. According to Business Day, Stellar Capital Partners has already got undertakings from the owners of 65% of the outstanding shares in hand.

Kleoss Capital and Real Foods

And in the first of a trio of undisclosed deals, Kleoss Capital announced it was taking a minority stake in Real Foods, a South African food, health and wellness company which was set up in 2013. They typically look to do deals in the R50 million to $150 million range.

African Rainbow Capital and Colourfield Liability

In the second, African Rainbow Capital, the investment vehicle set up by billionaire businessman Patrice Motsepe is taking a minority stake in Colourfield Liability Solutions, an investment manager based in Johannesburg and in the third, Egyptian private equity firm BPE Partners is partnering with Daikin Industries to set up Daikin Airconditioning Egypt. There are high hopes that the country’s burgeoning population and the large-scale urban development projects needed to accommodate them will require significant investment in air conditioning products and services.

Quantum Global and PwC Nigeria

In people move news, Quantum Global has appointed investment banker David Mauro Figueiredo de Carvalho to be the Africa-focused private equity investor’s Regional Director for Angola and Mozambique. His appointment is the latest in a string of hires the firm has made during the last few months in support of its expansion plans for the African continent. And Esiri Agbeyi and Femi Osinubi have both been promoted to PwC Nigeria’s partnership ranks. Agbeyi will now lead the Tax and Regulatory Service team in Nigeria, helping clients structure inbound and outbound investments across a number of sectors while Osinubi will head up the firm’s initiatives to build the Internal Audit, Commercial Assurance, Data and Analytics service lines in Nigeria and the broader West African market.

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