TPG Growth leads Gro Intelligence’s Series A2 roundAfrica Capital Digest

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TPG Growth has led a Series A2 round investment in Gro Intelligence, a New York and Nairobi-based agricultural data analytics business. The alternative investment giant’s growth equity platform was joined by Data Collective and a group of strategic family offices in backing the firm, the financial details of which were not reported. The fresh funds will be used to support the firm’s product development, recruitment and sales plans.

The investment was sourced via TPG’s strategic relationship with EchoVC, a seed and early-stage venture capital fund which targets investment opportunities in sub-Sahara technology companies. It’s the second deal this year that’s come about as a result of the relationship between the two investment firms, following their participation in Frontier Cars Group’s $22 million investment round in May this year.

“Gro Intelligence is transforming how data is used across the agricultural sector and is a natural partner for TPG Growth, given our experience with companies specializing in data, analytics and machine learning,” said TPG Africa’s Managing Partner Yemi Lalude, adding that the deal “…highlights the rich opportunities that exist to invest in early-stage technology companies that have a presence in Africa but can also operate successfully on a global level.”

Gro Intelligence was founded in 2014 to solve the problem of analyzing agricultural data which is both complex and unstructured requiring many man hours of analysis to sort and process. THe firm has built a product dedicated to search and predictive analytics for the agriculture sector, synthesizing hundreds of trillions of data points from disparate sources and providing its users with comprehensive, real time support for mission-critical decisions. Beyond aggregating and transforming data, Gro Intelligence has developed new analytical tools, algorithms, and predictive models, marrying domain expertise with machine learning to allow users unprecedented current and future insights into the global food and agriculture industry.

 

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Africa50 finalizes equity stake in Egyptian solar plantsAfrica Capital Digest

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Africa50 has signed long-term financing agreements with Scatec Solar and Norfund to develop utility scale photovoltaic power plants in Egypt. The infrastructure fund, which is backed by the African Development Bank and more than 20 African countries, is contributing equity in exchange for a 25% stake to fund construction alongside Scatec and Norfund. In total, the project is leveraging funding of approximately $450 million. The European Bank for Reconstruction and Development, FMO, the Green Climate Fund, the Islamic Development Bank, and the Islamic Corporation for the Development of the Private Sector are all providing senior debt for the project.

Once complete, the six planned plants, which will sited at Benban, north of Aswan, will generate about 900,000 MWh of clean electricity annually which will be sold under 25-year power purchase agreements to the state-owned  Egyptian Electricity Transmission Company. It’s estimated the plants will prevent more than 350,000 tons of carbon dioxide in the country, which currently relies on thermal generation for more that 90% of its electricity requirements.

“This project is a good example of how Africa50, working with effective partners such as Scatec and Norfund, as well as the Egyptian authorities, can facilitate infrastructure project development in Africa,” Alain Ebobissé, Africa50’s CEO was quoted as saying in a statement released by the fund. “We are pleased to help Egypt, an important shareholder, diversify its power generation mix while lowering greenhouse gas emissions.”

While this is the first early stage investment for the fund, it is not the first time the fund has worked with Scatec Solar and Norfund. In December last year, the three organizations teamed up to develop an 80MW solar photovoltaic independent power project near Dutse, in Nigeria’s Jigawa state.

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Sun Exchange raises $1.6mln seed roundAfrica Capital Digest

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Sun Exchange, a solar cell marketplace based in South Africa, has raised $1.6 million from a group of South African and American investors. The investor group includes New York-based Network Society Ventures and Johannesburg’s Kalon Venture Partners as well as American accelerators BoostVC, Techstars and Powerhouse. The funds “…will boost our capacity to meet the demand for our pipeline of commercial-scale solar power projects, located in the sunniest regions of the planet,” Sun Exchange’s CEO Abraham Cambridge wrote on the company’s blog.

Through Sun Exchange’s solar marketplace, investors can buy solar cells which are then leased to businesses, hospitals, factories and other end users in power-hungry parts of the world. The company arranges solar equipment leases for investors and handles revenue collection and distribution systems enabling passive streams of rental income. The block chain-based platform gives retail and institutional investors worldwide access to solar panel ownership, whilst giving businesses and communities in emerging markets the ability to purchase renewable power that both reduces costs and drives sustainable development.

It’s the fastest growing source of energy, but billions of people don’t own their own roof or don’t have the capital to go solar,” added Cambridge. “By breaking down solar panel ownership to a single cell we reduce the cost of going solar by three orders of magnitude and we’re utilizing empty roof space in some of the sunniest cities on the planet…”

Assets are denominated in Bitcoin, thereby increasing transparency and reducing the costs of cross-border transactions which are both problems that inhibit many commercial solar projects from accessing traditional funding.

 

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Van Zwieten steps down as CEO of EMPEAAfrica Capital Digest

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Robert van Zwieten, CEO of the Emerging Markets Private Equity Association or EMPEA, is stepping down from his role in early November after four and a half years at the helm of the industry association. As yet, no successor has been found, and EMPEA’s Board have established a CEO Search Committee to find his replacement.

Thanking him for his service, EMPEA Chair Robert Perry noted that “Under his leadership, EMPEA adopted an ambitious long-term, strategic plan and made tremendous progress in putting that plan into action. The organization is more relevant and valuable to our member firms, and the association’s stature as convener, researcher and industry leader has grown.”

EMPEA has more that 300 member firms representing institutional investors, fund managers and industry advisors who together manage more than US$5 trillion in assets across 130 countries. As well as advocacy initiatives, the association provides its members data on long-term, private capital investments in private equity, venture capital, infrastructure/real assets and private credit as well as educational and networking opportunities in both in-person and digital formats.

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Abraaj-backed Libstar acquires Sonnendal DairiesAfrica Capital Digest

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Libstar, a large unlisted food and personal care business in South Africa, has had its deal to acquire Sonnendal Dairies approved by the country’s Competition Commission. The financial terms of the transaction were not reported.

Yoghurt producer Sonnendal Dairies joins a portfolio of 28 fast moving consumer goods companies operated by Johannesburg-headquartered Libstar throughout South Africa. The group, which generates in excess of R7 billion (about $495 million) in revenues annually, sells to the foods service industry and the private label segments of larger retailers as well as manufacturing own-brand products and products for other brand owners in the food, beverage, household and personal care segments of the market.

The Abraaj Group first backed Libstar in late 2014, buying stakes owned by fellow-private equity fund managers Metier, Old Mutual Private Equity, Development Partners International and Lereko. In July this year, Bloomberg reported sources as saying that Abraaj was evaluating the possibility of an IPO for Libstar which could value the firm as much as $1 billion.

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Weekly Wrap, October 23rd, 2017; Quantum, OMAI, BPE Partners and others make private capital deal news last weekAfrica Capital Digest

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Last week in brief…October 23rd, 2017

While there were no fundraising announcements in Africa last week, there were a few private equity deals. And a couple were in some of the more unusual sectors. Throw in a trio of portfolio company-related deals, and you have the full range of transaction activity for the week.

Quantum Global Alternative Investment Management announced the completion of the sale of its stake in Savannah Cement following approvals from Kenya’s competition authority. Terms of the deal were not disclosed. Quantum had originally backed the cement company in 2015 via its $1.1 billion Infrastructure Fund, since when it has grown to produce up to 1.5 million tons of cement a year.

Old Mutual Alternative Investments is taking a 50% stake in Faircape Life Right Holdings for an undisclosed sum. The deal is being transacted on behalf of Old Mutual’s Retirement Accommodation Fund, a R2 billion investment vehicle launched in May 2015 to target opportunities offered by the growing demand for retirement accommodation in South Africa.

A subsidiary of The Faircape Group, Faircape Life Right Holdings owns and operates six luxury lifestyle villages with 976 residential units with associated healthcare facilities. The villages, which offer a selection of 1,2 and 3 bedroom homes with facilities specifically tailored for active retirees, are positioned in a variety of prime locations in the Western Cape.

In the first of two poultry-related deals announced last week, social impact investor AgDevCo announced it is backing Rwanda’s Uzima Chicken with $3 million of debt. The capital will be used to expand the company’s capacity to produce between 8 million to 10 million birds per year.

Farther south on the continent, Public Investment Corporation or PIC, the manager of South Africa’s Government Employees Pension Fund, has received South Africa’s Competition Commission approval to take over troubled poultry producerDaybreak Farms. According to reports, PIC has a turnaround strategy in place which is already beginning to bear fruit.

In portfolio asset-related deals, Impact Oil and Gas, an Africa-focused exploration company backed, by among others, Helios Investment Partners, has signed two deals with French oil major, Total. Both deals, which involve selling significant portions of a couple of the firm’s assets, raise the number of oil majors with whom the firm has partnered to four, following previous farm-out deals with CNOOC, Exxon and Statoil.

Ebtikar, a non-banking financial services platform joint venture backed by Egyptian private equity fund manager BPE Partners and MMG Group for International Industry and Trade (MTI), has acquired a 60% stake in TBE Egypt for Payment Solutions and Services, (commonly known as Bee). The transaction, which is reportedly worth EGP156 million (or approximately $8.8 million), is structured as a mix of debt and equity. Bee provides its customers with the ability to pay their service providers including mobile operators and internet providers as well as other end users through a network of over 35,000 retailers in Egypt.

In the renewable energy sector, ENGIE has acquired Fenix International, a venture-backed renewable energy company with offices in East Africa and Silicon Valley. The deal makes Fenix the first solar home system provider to link with a major energy provider. The company, which employs 350 people, operates predominantly in Uganda and has recently expanded into the Zambian market.

For our final item this week, Exotix has appointed former Morgan Stanley and FBN Capital banker Chiamaka Ezenwas as Head of Investment Banking in West Africa. Exotix has been expanding its investment banking reach in Africa, particularly in the energy, financial and consumer sectors. Recently, the bank was one of the three deal managers, who with JPMorgan and Morgan Stanley worked on Guaranty Trust Bank tender offer for its $400 million 2018 Eurobond.

As always, you can review these and other stories by clicking through to this week’s complete issue of Africa Capital Digest.

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Old Mutual’s Retirement Accommodation Fund buys 50% stake in FaircapeAfrica Capital Digest

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One of Africa’s largest private equity and alternative investment managers has acquired a significant stake in Faircape Life Right Holdings. Old Mutual Alternative Investments is taking a 50% stake in the property company for an undisclosed sum. The deal was led by Greg Coe and Gavin Wolmarans on behalf of Old Mutual’s Retirement Accommodation Fund, a R2 billion ($146.6 million at current rates) investment vehicle launched in May 2015 to target opportunities offered by the growing demand for retirement accommodation in South Africa. As part of the deal, the fund will have board representation at Faircape.

A subsidiary of The Faircape Group, owners and managers of one of the largest retirement portfolios in the Western Cape, Faircape Life Right Holdings owns and operates six luxury lifestyle villages with 976 residential units with associated healthcare facilities. The villages, which offer a selection of 1,2 and 3 bedroom homes with facilities specifically tailored for active retirees are positioned in a variety of prime locations in the Western Cape.

The transaction is the fourth, and, by some margin, the largest transaction for the open-ended fund and raises the total number of retirement units owned by Old Mutual’s Retirement Accommodation Fund to approximately 16,000 units across 10 separate villages. These include the De Plattekloof Retirement Lifestyle Estate, a R281 million investment for the fund, the Zevenwacht Estate, a R115 million investment for the fund, and the Featherwood Estate, which the fund backed with R90 million.

“We are delighted to announce our new 50% shareholding in Faircape Life Right Holdings and our partnership with Mike Vietri and his management team, who will continue to be responsible for the day to day operations,” Paul Boynton, Old Mutual Alternative Investments’ CEO said, adding that the firm “….has deservedly earned a reputation as a premium retirement lifestyle brand in South Africa and by partnering with OMAI now has ready access to expansion capital to fund growth in an attractive market with strong demand for premium accommodation.”

 

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Quantum Global exits interest in Savannah CementAfrica Capital Digest

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Quantum Global, the Africa-focused private equity and infrastructure investment manager, has completed the sale of its stake in Savannah Cement. The deal, which has now received the necessary regulatory approvals, sees Mauritius-based Seruji, which already holds a 60% stake in the Kenyan cement maker, expand the size of its holding. The financial terms of the transaction were not disclosed.

Quantum Global initially backed the company in 2015 via its $1.1 billion Infrastructure Fund, one of the largest private equity funds in Africa exclusively focused on infrastructure opportunities on the continent. Set up in 2012, the cement factory, which  is located in Athi River about 30 kilometres from Nairobi, now produces up to 1.5 million tons of cement a year.

“Our active partnership with Savannah Cement and its management team has created significant value and we are pleased to have been involved in such a critical growth phase for the company,” Quantum’s Group Head of Active Management, Martin Bachmann was quoted as saying in the release announcing the sale.  “Through its development of state-of-the-art products and technologies and its focus on the best use of green technology and on revolutionising environmental management in the cement industry, the company is well positioned to compete in an expanding marketplace, and we wish them continued success.”

Clifford Chance provided legal advisory services to Quantum Global for this transaction.

 

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Impact Oil & Gas signs farm-out deals with TotalAfrica Capital Digest

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Impact Oil and Gas, an Africa-focused exploration company backed, by among others, private equity firm Helios Investment Partners, has signed two deals with French oil major, Total.  Both deals, which involve selling significant portions of a couple of the firm’s assets, raise the number of oil majors with whom the the firm has partnered to four, following previous farm-out deals with CNOOC, Exxon and Statoil.

In the first of the two deals, Total E&P Namibia is acquiring 70% of Impact’s interests in Block 2913B which is located off Namibia adjacent to the South African maritime boundary. Impact first invested in the Block, which covers over 8,000 square kilometers at water depths of between 2,500 metres and 3,250 metres in early 2014. The sale to Total has already received the necessary approvals, giving the firm a 70% interest, with Impact retaining a 20% stake and the balance being held by NAMCOR, the state-owned oil company.

The second farm-out sees total acquiring 77.78% of Impact’s interests in Orange Basin Deep TCP, South Africa, once an Exploration Right is granted over the area. Orange Basin TCP lies off shore on the west coast of South Africa, covering over 15,000 kilometers at water depths of between 2,700 metres and 4,250 metres. On completion of the farm-out, which is conditional upon certain government approvals, Impact will retain a 22.2% stake in the asset.

Helios first backed Impact in August 2014, taking a 13.6% stake in the company and helping fund the completionof pending licence acquisitions and early work programs on Impact’s asset portfolio. Impact Oil and Gas was founded in 2009 as an Africa-only, pure exploration company focused on building an attractive group of exploration assets and securing large, independent oil companies as partners. The company’s current portfolio covers over 90,000 square kilometers across South Africa, Namibia, Gabon, Senegal and Guinea Bissau.

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