Saturday, April 27, 2013

Private Equity Moment

Following the January  post on M&A deals, here are some recent events. 

The Private Equity Confidence Survey was published by Africa Assets and Deloitte and it showed that, in 2012, private equity firms invested $1.13 billion towards 58 deals in Sub-Saharan Africa. This was a a slight decline from 2011, and that Kenya, Nigeria and South Africa accounted for 45% of the deals in 2012.  Also in the survey; 
- Despite the enormous hype surrounding Kenya’s growing IT sector, dubbed the “Silicon Savannah”, no IT or venture capital deals were reported in eastern Africa in 2012. This clearly reflects that both the IT sector and VC industry in eastern Africa, and indeed Africa more broadly, remain quite young and underdeveloped. Interestingly, IT-Tech deals were done in 2012 in South Africa, Ghana, Nigeria and the DRC.
-  One conference speaker on VC deal structuring said the problem is ‘Kenyan entrepreneurs believe they each have a fantastic proprietary idea, and they want lots of money up front to develop it, regardless of the lack of business model planning done by many of them. 
- The dominant exit route across Africa is a sale to a strategic investor..and most investors expect the average investment lifecycle to be between two to five years.

Recent M&A deals approved by the Kenya Competition Authority include:

Agri-Business & Food
- The acquisition by Almasi Beverages of Kisii Bottlers, Rift Valley Bottlers and Mount Kenya Bottlers 
- The acquisition of Lord Erroll Limited by Koita International Kenya.
- The acquisition of Ocean Agriculture (EA) by JH Verwiel.
- The acquisition of Siret Tea Company by Siret Outgrowers Empowerment & Produce Company. 
- The acquisition by the Rai Family of shares of Sukari Industries.

Banking, Insurance & Finance
- The acquisition of I&M Bank by City Trust Limited.
- The acquisition of PSJ & Associates by PKF Kenya.
- The acquisition of 66.66% of Mercantile Insurance by Colina Holdings

Building, Energy & Real Estate
- The acquisition of shares in Cemtech (who were to put up a cement factory in Pokot) by Rock Field Corporation. 
- The acquisition of Economic Housing by Mali Rasili Group. 
- The acquisition of all assets of Mutonga Mutuandaju Small Hydro Power  (a hydro-power project in South Imenti, Meru) by Intrepid Energy. 

Health & Beauty
- The purchase of shares in Alexander Forbes Healthcare by Zanele Investments Holding Company
- The acquisition of the health and beauty business (cosmetic & hair brands) of Interconsumer Products by L’Oreal East Africa 
- The acquisition of certain assets & liabilities of RTT Health Services by Imperial Group 
- The acquisition of Lyntons Pharmacy by Luwada Management
- The acquisition of Star Biotech Lab & Diagnostics (a pathology lab) by Metropolis Health Healthcare
- The acquisition of an indirect interest in the assets of Strategic Industries Limited.

Media & Communications
- The acquisition of Alldean Networks Limited by ISAT Africa Limited FZC and Richard W. Bell.
- The acquisition by EMC Acquisition, LLC and Emerging Markets Communication, LLC of EMC, LLC.
- The acquisition of shares in Dodhia Packaging Limited by Corpak Africa and Corpark Kenya
- The acquisition of  the investment in Rodwell Press held in Interlabels Africa by Interlabels Industries Private Limited.

Oil & Mining 
- The acquisition of Aviva Mining Kenya by Africa Barrick Gold (from Aviva Corporation)
- The acquisition of 87.25% of Pacific Seaboard Investments Limited by Tardigrade International Inc.

- The acquisition of East Africa Safari Ventures by Natural Habitat Safaris.
- The acquisition of 80% of Nairobi Tented Camp  by Porini Limited.
- The acquisition of Leleshwa Safari Company  by Natural Habitat Safaris 
- The acquisition of Vittoria Limited and subscription of shares in Olarro Conservancy Limited by Arabian Ranchers Property Investments 

Transport, Engineering & Logistics 
- The acquisition Swift Global Logistics by DSV Air & Sea Holdings
- The purchase of 55% of Tradewinds Aviation by NAS Africa Aviation 
- The acquisition of 60% of Treadsetters Tyres by Bharat Doshi, Aashit Shah and Carlet Overseas Corporation.
- The acquisition of 40% of Tredcore Kenya by Magister Limited
- The acquisition of Vtechnologies (Kenya) Limited by UHT SAS.

More deals approves in May 2013
- The acquisition of the remaining shares in Cable Television Network by Wananchi Group
- The acquisition of 99% of Microensure Advisory Services by Microensure Holdings
- The acquisition of by Cheki Africa Media.
- The acquisition of 1,680 steers and 792 cows from Delamere Estates by Ngombe Ltd 
The acquisition of 80% of Altech Kenya Data Networks and 100% of Altech Swift Global Limited by Liquid Telecommunications Holdings
-  The acquisition of the business of Daru Shifa Centre by Viva Afya
- The acquisition of Endebess Estates (Kilifi Holdings)  by Ballobhai Chhotabhai Patel.

Other recent deals in the News

- Jacana Partners and InReturn Capital announced a merger, and plans for a $75 million SME Fund

- 88mph and the eVentures Africa (eVA) Fund announced a partnership to improve investment opportunities

- Does Tuskys Supermarket want to buy Ukwala  a rival supermarket chain?

- 90% of I&M Bank shareholders have accepted the takeover by City Trust Ltd and the deal makers have been granted a 2 week extension to reach out to the remaining shareholders. Next steps include a share split.  mandatory acquision of the balance of shares, and a possible NSE-listing on June 12. 

-  Airtel signed an agreement to fully acquire Warid Uganda – the combined entity will remain the number two carrier in Uganda with 7.4 million customers  and a market share of 39%. 

- Fastjet and the CEO of Fly540 agreed to cease their court battles and work towards an acquisition of Fly540  - freeing FastJet to commence Kenyan operations. 

- A summary of China investments around the world in the year 2011.

-  In the US, M&A of VC-backed startups are at a four year low
-  Venture capital merger and acquisition activity in the US dropped in the first quarter of this year, ending with the fewest exits since the first quarter of 2009, according to the just-released venture report from Dow Jones VentureSource.
- Some 86 M&A transactions were done for a total amount of $4.3 billion, down 44% in deal activity and a decline of 24% in capital. In the final three months of last year, 113 deals brought in $7.6 billion to the VC-backed startups.
- Companies raised $6.36 billion in the first quarter of 2013, the lowest amount raised since the third quarter of 2010, when $6.1 billion was raised. In the first three months of the year, 752 companies were funded, which is similar to the 732 companies that got funded just over two years ago. Healthcare deals accounted for almost a third of the invested capital.

EDIT Jambo Biscuits food processing business is being transferred Kilimanjaro Foods.

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