Weekly Wrap, July 17th, 2017; Milost, Abraaj, Actis and others make private capital news last week
Last week in brief…July 17th, 2017
There were, for Africa, some big numbers flying about last week for private equity deals. Only one concerned a direct investment of capital, however, while the others related to deals that had been done or are about to be done.
Milost Global, a New York-based private equity firm with $25 billion in committed capital, agreed to make its first investment in Ghana last week, agreeing a $300 million deal with Eco Medical Village to develop West Africa’s largest private hospital in Accra. The financing will be made up of $100 million in equity and $200 million in debt, the latter bearing an annual interest rate of 5%, payable quarterly in cash.
The funds will be used to support the development and construction of Eco-Medical Hospital, a 380-ward/700-bed facility, which, once complete, will serve West Africa’s upper and middle class consumers. Currently, this market segment seeks medical treatment outside Africa. In addition to the main hospital in Accra, Eco Medical plans to establish affiliated satellite units in each of the countries in the West African sub region.
Next up was Actis, who announced the launch of a $275 million higher education platform for Africa. Honoris United Universities, as the new platform has been branded, will be anchored by Actis’ existing and planned education assets including Tunisia’s Université Centrale Groupe, Morocco’s Université Mundiapolis, Ecole Marocaine des Sciences de l’Ingénieur, Management College of Southern Africa and the REGENT Business School. The new platform currently serves 27,000 students at 48 campuses in 9 countries, numbers it expects to grow significantly as enrollment rises and more institutions are acquired and added to the platform.
At an extraordinary general meeting held last week, over 90% of Atlas Mara‘s shareholders approved the deal to sell at least a 30% stake to Fairfax Africa, an investment subsidiary of Canadian life insurer, Fairfax Financial. The $200 million deal means Fairfax will become the biggest single shareholder in the African banking platform, which has interests in seven sub-Saharan countries.
Fairfax will acquire at least 30% of the equity and mop up any additional shares that Atlas Mara’s qualifying existing shareholders decline to take up. The convertible bond will convert at the issue price of $2.25 per share upon the closing of the offer.
On a much smaller scale, Long4Life, the listed investment firm launched by BidVest founder Brian Joffe earlier this year, announced its second deal last week, agreeing to pay R116 million, or about $9 million, in a cash and share deal for Sorbet, a South African chain of beauty salons.
The company, which sources investment opportunities among consumer sector-oriented companies or ones which the firm describes as having a “lifestyle” focus, found Sorbet’s strong brand and nationwide footprint to also be appealing, positioning the firm well to expand both organically and through acquisition.
In fundraising news, the IFC is mulling a $20 million commitment to the Abraaj Global Credit Fund, a planned $500 million vehicle which will target debt investments predominantly in opportunities in mid-sized businesses which provide products and services to the consumers in emerging market regions. The fund’s capital will be invested in growth credit and mezzanine debt lending deals in firms that are looking for growth capital to support their expansion plans. Typically these might involve financing capital expenditure, acquisition financing, project financing and other situations that require a customized credit solution.
There were a couple of significant job announcements last week. Oumar Seydi has assumed the role of the IFC‘s Regional Director for Sub-Saharan Africa, expanding his leadership role within the development finance institution. He originally joined the IFC in 1997 as an Investment Officer, and as held several senior roles withing the development finance institution since.
And Nabeel Laher has been appointed as Head of International Private Equity at Old Mutual Alternative Investments, succeeding his boss James Regout, who is retiring after an almost 40-year career at the firm. In his new role, Laher will oversee the investment activities and management of funds with more than $600 million in capital. He joined the South African investment management firm in 2015 and has led a team of investment professionals sourcing, executing and managing investments for a number of funds. In particular, he has been responsible for the roll out of the firm’s Africa Fund of Funds.
Brookings has taken a look at the G20’s Compact with Africa, details of which were announced last week. They examine the compact’s structure and aims and the reasons why it may have a better chance of succeeding compared with previous G7-related initiatives for the continent.
And finally, an interesting piece in the Harvard Business Review exploring how doing a deal for a digital company is different from traditional M&A. What’s more, as the article says, M&A executives may find that “…everything they thought they knew about M&A may actually not help.”
As always, you can review these and other stories by clicking through to this week’s complete issue of Africa Capital Digest.