Category Archives: Victoria

M&A Moment: May 2021

Various merger/acquisition (M&A) deals in the last few months in East Africa since the last update.

(1 US dollar equals 110 Kenya shillings)

Banking and Finance: Finance, Law, & Insurance M&A

Kenyan Banks

  • The Competition Authority approved the acquisition of 24.9% of the Montessori Learning Centre by Victoria Commercial Bank.
  • Stanbic Africa gets an extension to the end of 2021 to increase its Stanbic Kenya stake to 75%, by acquiring 14.8M shares from other shareholders through the NSE
  • Mwalimu National Sacco has acquired 100% ownership of the trouble-ridden Spire Bank from business tycoon, Naushad Merali – via @moneyacademyKE

Regional Banks

  • Equity Bank to merge BCDC_RDC & Equity Bank Congo which are its subsidiaries in DRC.
  • I&M Holdings PLC has completed the acquisition of 90% of Orient Bank Limited from 8 miles LLP and Morka Holdings Limited. OBL is the 12th largest bank and a licensed and established commercial bank in Uganda. with 70,000 customers and a network of 14 branches. 
  • KCB Group to acquire 62% of BPR, Rwanda’s second-largest bank, and 100% of Bank ABC in Tanzania – two banks that Atlas Mara had offered to Equity Group.
  • Atlas Mara to sell its Botswana bank, BancABC, and its subsidiary’s BancABC Mozambique to Access Bank.
  • Atlas Mara denies receiving offers from a Nigerian or any other bank to acquire its stake in UBN – the Union Bank of Nigeria.
  • Atlas Mara has completed the sale of BancABC, its Mozambique bank to Access Bank.

Investment Markets and Deal Makers

  • The Johannesburg Stock Exchange to acquire a majority stake in South Africa’s second-largest share registry.

Insurance

  • Allianz will acquire a controlling stake in Jubilee Insurance’s property & casualty business in Kenya, Tanzania & Uganda and the short-term insurance in Burundi and Mauritius for USD 100 million. In the deal, Jubilee will acquire the business of Allianz in Kenya to draw on its global expertise in retail, digital insurance, and micro-insurance.
  • The Competition Authority approved the acquisition of 56% of Agriculture and Climate Risk Enterprise (ACRE Africa) by Zep Re (PTA Insurance Company)
  • The Competition Authority approved the proposed acquisition of 100% of Resolution Leapfrog Holding by Linkham Services.
  • Liberty Holdings to buy out the Coronation (Hilton, Vanderbilt) and Kimberlite fund shares in @LibertyLifeKe in a private deal. Liberty shareholding increases from 57% to 73%, but no plans for a buy out offer and shares will remain listed on the NSE.
  • Monarch Insurance to sell a majority stake (51%) of the company to the Holmarcom Group of Morocco through its holding company “Holmarcom Insurance Activities.” The Kamu Group and Maisha Bank will remain as minority shareholders.
  • Minet Group and Africa Lighthouse Capital have acquired Aon’s shareholding in Aon Botswana, and will now operate as Minet Botswana.
  • Old Mutual Life Assurance has been acquired by UAP Life Assurance for Kshs 2.59 billion.

Remittances

  • The proposed merger involving ECP Africa Fund IV LLC and ECP Africa Fund IV A LLC and Remitix Holdings (Mauritius). Remitix is a Mauritius-based holding company, which holds the business known as the “Mukuru,” a cash remittance technology platform that allows users to send or receive money across various countries in Sub- Saharan Africa and provides foreign exchange services.
  • WorldRemit to acquire Sendwave .. in the last 12 months, the two companies have sent $7.5 billion in transfers (mainly to West and East Africa), generating $280 million in revenue
  • Stripe acquires Nigeria’s Paystack for $200M+ to expand into the African continent.
  • Ghana’s remittance firm Zeepay acquires Mangwee Mobile Money in Zambia – via @SamWakoba

Other

  • The Competition Authority approved the acquisition of 85% of Century Microfinance Bank by Branch International on condition that they each maintain terms agreed with existing borrowers until they expire.
  • South African law firm Cliffe Dekker Hofmeyr (CDH) and Nairobi-based corporate law boutique Kieti Law have agreed to a merger, established under CDH’s name.
  • Kenyan agency banking startup Tanda is expanding its operations regionally after closing a funding round and has secured key strategic partnerships with Mastercard & Interswitch. Tanda’s platform and network supports 58 banks and saccos, 4 telecoms, 12,000 merchants and agents and has served over 300,000 customers.
  • The business of Altima Africa has been transferred to Stratostaff EA Ltd.

Agri-Business, Food & Beverage M&A

  • The Competition Authority approved the proposed acquisition of 50% of Bidco Land 0′ Lakes limited by Aaryan Investments.
  • The Competition Authority approved the proposed acquisition of control of the bakery business of Kenblest Ltd by Kenblest Foods, the proposed acquisition of the maize milling business of Kenblest Ltd by Max Grains and the proposed acquisition of control of the wheat milling business of Mcneel Millers by Kenblest Processors. Kenblest once owned 12.5% of Imperial Bank before it shut down.
  • The Competition Authority approved the proposed acquisition of Glacier Products by ExEo Capital through their Agri-Vie Fund II
  • Eat’N’Go acquires the Domino’s Pizza and Cold Stone Creamery franchises in Kenya – and aims to grow from running 147 stores in Nigeria and Kenya to 180 across Africa by year-end.
  • Certain assets of the manufacturing, production, processing and dealing in agricultural and farm products business carried on by DNC Foods will be transferred to Bigcold Kenya.
  • The assets of the meat processing and food distribution business carried on by Alpha Fine Foods Limited will be transferred to Bigcold Kenya.
  • Coca-Cola European Partners has acquired a 25% stake in Innovative Tap Solutions (PourMyBeer) whose technology allows consumers to pour and pay for drinks themselves, cutting queues, reducing unnecessary contact & wait times, and freeing up staff.
  • The Kenya Ministry of Defense is doing public participation to facilitate the transfer of the Kenya Meat Commission from the Ministry of Livestock to the Department of Defense.
  • The Competition Authority has approved the acquisition of 50% of Propack Kenya by Jaiminia Patel. Propack had a turnover of Kshs 711 million in 2019.
  • EDIT: Tana Africa Capital has acquired a minority stake in Kensington Distillers & Vintners (KDV) that owns majority stakes in Monument Distillers Kenya, Monument Distillers Nigeria and Truman & Orange South Africa. KDV offers high-quality wine and spirit brands and plans to grow its footprint into other high-growth African markets. Tana, a JV between the Oppenheimer Family and Temasek Holdings, has raised $600 million and invested in a diverse portfolio across 20 African countries.

Logistics, Engineering, Manufacturing & Agri-Biz M&A

  • The business and assets of Mindtrac Ltd carrying out the business of e-commerce software development will be transferred to Dukaree Innovations Ltd which will carry on the business of e-commerce software development.
  • Amethis acquired a minority stake in Nouvelle Minoterie Africaine (NMA), a leading FMCG company in Sénégal, which produces and distributes poultry and livestock feed, pasta and wheat flour.
  • Carbacid shareholders vote on the Kshs 1.24 billion buyout of BOC Gases at the end of January and may de-list the acquired company in future. Carbacid set out to acquire 100% of BOC Kenya and BOC accepted the offer and agreed to retire directors, transfer trademarks, and rebrand as all employees will be retained. Carbacid and Aksaya are confident that minority BOC shareholders will accept an offer to buy 100% of the firm at Shs 63.50/share by 6 April. BOC’s board, having sold its 65%, says the deal is willing buyer, willing seller and will not make a recommendation to fellow shareholders.
  • Logistics platform Amitruck and ecommerce platform Sky.Garden announced a partnership to form an end-to-end digital chain for goods pick-up and deliveries to the last mile.
  • The Competition Authority has approved the acquisition of certain assets of Orbit Enterprises by R. K. Sanghani. Orbit had a turnover of Kshs 97 million in 2019.
  • The Competition Authority has approved the proposed joint venture between Elopak AS and Nampak Southern Africa Holdings.

Airline/ Oil/Energy/Mining M&A

  • Heirs Holdings and its affiliate, Transnational Corporation of Nigeria Plc have acquired 45% participating interest in Nigerian oil licence OML 17 (that can produce 27,000 barrels of oil per day) and related assets from Shell Nigeria, Total Nigeria and ENI and have sole operatorship of the asset. The deal involves financing of US$1.1 billion from a consortium of global and regional banks and investors (Afreximbank, ABSA, Africa Finance Corporation, Union Bank of Nigeria, Hybrid Capital, and Amundi).
  • The Competition Authority approved the acquisition of control of Quantum Power East Africa GT Menengai limited by Globeleq, CDC’s energy firm. QPEA is among three firms that were awarded contracts by the Geothermal Development Company (GDC) to develop power plants in Menengai.
  • The Nairobi Securities Exchange suspended trading in Kenya Airways shares following a request from the airline in anticipation of a government buy-out.
  • Express Kenya CEO Hector Diniz gets approval to buy another 5% and increase his combined shareholding to nearly 77%, but with no intention to make a take-over offer or delist the company from the NSE.
  • Transcorp acquired Afam Power Plc and Afam Three Fast Power in a $300 million deal in November 2020.  
  • Amitruck has secured an ‘undisclosed’ investment from Dynamo Ventures and other angel investors after completing the Google for Startups Accelerator Africa.
  • The Competition Authority has approved the acquisition of 60% of Raysut Cement by Zou Fengqi. Raysut had a turnover of Kshs 877 million in 2019.
  • The Competition Authority has approved the acquisition of 100% of Kilimapesa Gold by Mayflower Capital Investments. Kilimapesa had assets of Kshs 742 million in 2019.
  • The Competition Authority has approved the acquisition of (i) Solutions East Africa and (ii) Seagas Kenya by Proto Energy East Africa on condition that 80% of staff at the target companies are retained after the merger.

Education, Tourism, Real Estate & Supermarkets M&A

  • The Competition Authority approved the proposed acquisition of an additional 50% in Nakuru Meadows Development by Pan African Housing Fund LLC
  • Aleph Hospitality, an independent Dubai-based hotel management company has taken over the management of three hotels – Boma Nairobi, Boma Inn Nairobi and Boma Inn Eldoret, which are owned by Red Court Hotel, a subsidiary of Kenya Red Cross Society. In Kenya, Aleph also operates the Best Western Plus Westlands in Nairobi and has been awarded the management contract for a Protea by Marriott hotel in Kisumu, as well as a business hotel to be located in Mombasa.
  • Umubano Hotel in Kigali had been acquired by Madhvani Group for $13M after years under liquidation. The main issue with previous investors has always been a failure to make the requisite investment to expand the hotel which has been managed under Laico, Novotel, Meridian and Accord.
  • Thousands of Airbnb hosts got invitations to buy shares ahead of the IPO, but some did not respond.
  • Treasury plans to merge KICC with the Bomas of Kenya.
  • The Competition Authority has approved the acquisition of control of Mpala Wildlife Foundation Inc. and Mpala Ranch Ltd by  the trustees of Princeton University

Telecommunications, Education, Media & Publishing M&A

  • The East African Safari Classic Rally announced new owners, new management and a new direction for the world’s greatest classic rally, following Minti Motorsport UK’s takeover of the EASCR and Lynn Tundo was appointed as Managing Director of the Classic. 
  • MSP Sports Capital will invest £185m into McLaren Racing (McLaren F1 & IndyCar), acquiring a15% stake that will increase to 33% in 2022, in a deal that values the team at £560m.
  • American investment firm Dorilton Capital acquires the legendary family-owned Williams #F1 team.
  • TransAtlantic Capital Inc has acquired SUREBET, a Kenya licensed sports betting and lottery company. (via Nasdaq) 
  • Multichoice invested $112 million for a 20% investment in BetKing, a high-growth sports betting group with operations in Nigeria, Kenya and Ethiopia.
  • A trip down memory lane .. serendipitous that eLimu Kenya, a digital educational content firm, that was launched in the iHub, is now being acquired by iHub (CcHUB) 8 years later. – via @AmkaKenya
  • The CcHUB Syndicate that allows angels and early-stage investors to invest alongside CcHUB in high growth technology startups in Africa has funded three startups – Taeillo, Oneport and Stears Business after a due diligence process.
  • Ajua (formerly MSurvey), has acquired WayaWaya, the Kenya-based Artificial Intelligence and Machine Learning known for its innovative Janja platform, that enables borderless banking and payments across apps and social media platforms.
  • Millicom International which trades as Tigo, has signed agreements for the sale of its operations in Tanzania and its stake in the AirtelTigo joint venture in Ghana, marking its complete exit from the African continent.

Health and Medical, Pharmaceutical M&A

  • Mastercard has invested in Kasha Global Incorporated, a purpose-driven e-commerce platform providing essential access to health and personal care products along with the information required to support everyday hygiene needs.
  • The Competition Authority had approved the proposed acquisition of control of Africa Bio Systems by Maisha Holdings.
  • The Competition Authority approved the proposed acquisition of 100% of Dudutech Integrated Pest Management by Bioline Group SAS.

Other Notes

  • The Competition Authority seeks whistleblowers who can confidentially share information on cartel-like behaviour, price-fixing, unsafe products, unauthorized mergers etc. – and they can get a reward of Shs 1 million.
  • Safaricom restructured its strategy and innovation division in FY20 and introduced a mergers & acquisitions department to support strategic acquisitions.
  • Kenya’s Parliament has complained about why the Privatization Commission has not had a substantive board for two years, after the terms of six directors lapsed in June 2019 – and that at a time when the government is engaging with the IMF on the reform of state-owned entities, the Commission only has five directors who are mostly government officials.

Bank Review ’07 Part II

Small banks, range from $40 to $100 million

Showed an inability to grow as faster as the bigger bank, with few exceptions. Yet they are still profitable and reluctant to merge

The banks got a temporary reprieve when parliament shot down the government’s proposal that banks should have a minimum capital of 1 billion ($15 million) 3 years from the current 250 million shilling minimum’ but that proposal is likely to be revisited by future finance ministers.

35. (38) Fidelity Bank: Estimated assets 3.2 billion ($45.7M), profit of 45 million ($0.7 million) shillings for this quiet bank with little marketing activity but which was able to grow 40% during 2007.

34. (36) Credit Bank: Estimated assets of 3,300 million and profit of 120 million, for another quiet bank which grew about 15% in 2007.

33. (33) Middle East: Estimated 3.2 billion assets and profit of 80 million in 2007. However deposits and loans are down 6% from a year ago.

32. (35) Habib Bank: Estimated 3.5 billion assets and profit of 90 million, with growth of 12% from a year ago. Participated in the first Diamond trust rights first issue as a possible merger step.

31. (29) Victoria: Estimated 4.2 billion assets 140m in profit. Flat growth expect in loans and deposits (1%), but great in profitability which is improved by over 40% in 2007.

30. (32) Consolidated Bank: Estimated 4.5 billion assets, 20 million profit with the 30% growth from a year ago. There was public fallout between the MD and the board resulting in the board being fired by the Finance Minister. The Deposit protection fund (DPF) of the Central Bank plans to sell its 51% stake to private sector, and is likely to be found next year by private sale. A loss in 2005 makes the bank ineligible for an NSE listing and the owners the collapsed banks that form Consolidated Bank are likely to figure in as potential buyers.

30. (31) Equatorial: 4.7 billion assets and 90m in profit. The Sameer group bank Out-performed corporate big sister CBA growing by about 15% in 2007.

29. (34) Development Bank of Kenya: Estimated 4.8 billion and 200m in profit. Remarkable growth fro a development finance institution to record 45% growth in loans & deposits. Part of ICDC’s (Government) 90% stake in the bank is up for sale in 2008.

28. (28) Southern Credit: Estimated 4.9 billion assets, 80m in profit. 10% growth in loans and deposits, with about 40% growth in profits in 2007. Bank with a lady MD focus on cards

27. (30) Chase Bank: Estimated assets of 5.0 billion, and profit of 130 million. The winner of small bank awards, will open new branches next year and has set about achieveing a recapitalization target of 1 billion, through retained earnings.

26. (26) Giro: Estimated 5.3 billion assets, 70m in profit. With 7% growth in the year, It was supposed to be sold to state bank of India, but the deal is yet to be approved by regulators.

25. (27) Guardian: Estimated 5.8 billion assets, 45 million profit. Growth of about 15%

24. (23) ABC: Estimated 5.8 billion assets, 170 million in profits. With 12% growth from a year ago, ABC was one of the few ‘small’ banks that had a marketing push to target new customers in 2007 in addition to a recapitalization drive. Launched ‘kisima’ a flat fee account and has new branches.

23. (24) Habib AG Zurich: Estimated 6.1 billion assets, 200 million profit for another quiet bank which grew about 15% in 2007.

22. (25) K-Rep: Estimated 7.2 billion assets, 200 million profit . With international shareholding and micro-finance expertise is an natural candidate for a merger Was 29th two years ago and recorded about 60% growth in 2007.

21. (21) Bank of Africa 7.2 billion ($103 million) assets 160 million shillings ($2.3 million) profit in 2007. What is hopefully the first of many West African banks spreading eastwards has opened new branches and targeted growth of new business like asset finance.
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