Atta Financial Update

Executive summary: Africa’s private equity investors made significant commitments last year, but 2017 looks challenging.

2016 numbers continue to trickle in, and it is becoming increasingly clear that while the talk of Africa rising (or not) and commodity downturns persisted, investors, operators, and entrepreneurs in Africa kept their heads down and got on with business.

Private equity invested US$3.8 billion in 145 deals across Africa last year within a range of businesses from agriculture and energy to healthcare and financial sectors - up more than 50% from US$2.5 billion in 2015, according to data from the African Private Equity and Venture Capital Association. A relatively small number of large transactions in energy and utilities led the overall increase.

However, it is worth noting that last year’s US$3.8 billion is still less than half of the 2014’s US$8.1 billion, the highest investment year in recent record.

While the numbers in Africa look nominal in comparison with US private equity investments, they are still significant in most economies on the continent. Private equity investors tend to focus on more mature businesses and larger projects and many of such investors in Africa are looking at deals of US$50 million and above.

In 2016, transactions at US$250 million and above accounted for a majority of the total deal value.

Investments reported well in 2016, but likely such big deals had been in the works for a while - the factor is probably a lag from 2016’s economic worries. You could make a case for investors’ overriding economic concerns by noting the nearly 50% drop in fundraising for new African investment funds to US$2.3 billion in 2016 versus US$4.3 billion in 2015. This could mean fewer or smaller deals in 2017/18 - jury is out.

Fact: If you removed all of the empty space from the atoms that make up every human on earth, the entire world population could fit into an apple.

Ethos Private Equity to sell Universal Industries

  • Ethos is looking to sell Universal Industries to RMB Corvest, RMB Ventures and the Mineworkers Investment Company
  • Ethos Private Equity had originally taken the company private in 2011 in a deal that valued Universal at R1.3 billion (US$103m) at the time

Kleoss Capital has acquired a controlling stake in Debt Rescue

  • Debt Rescue is one of the country’s largest debt counselling firms - terms of the deal were not disclosed
  • The investment will help Debt Rescue, which has already won significant market share in South Africa

Oasis Capital's Africa Fund receives backing from Proparco

  • Oasis Capital has received a US$7m backing from Proparco, the French development finance institution
  • The fund - which held a US$27 million first close last year - is looking to raise US$50 million in total to invest in businesses providing essential services such as education, financial services, housing, healthcare, food services and hospitality