Category Archives: IMBank

Corporates Loving Golf

Historically, golf has been considered to be a costly sport in Kenya with difficulty in accessing equipment kits and membership clubs to play at. But now golf is enjoying increased corporate attention and bank sponsorships in the post-covid period. Some of these initiatives had begun in the period before the shutdowns in 2020, but the increased need for individuals to exercise in open spaces boosted more interest in hiking, cycling, jogging, and golfing. Golf clubs were previously seen to be losing touch with young people, and many of the new initiatives are designed to turn this around. 

Some ongoing corporate golf partnerships are:  

  • Kenya has been a multiple winner of Africa’s Best Golf Destination at the annual World Travel Awards and the Kenya Tourism Board is keen on using golf to promote tourism both by local and international travelers. Golf is played year-round in Kenya and the country has easy connections to other tourism facilities. KTB cites a consultancy research report that golf travelers spend 2.5x more than leisure travelers and stay for longer periods 
  • Absa Kenya has a long-running sponsorship of the Kenya Open Golf tournament which, with the support of the Government that aims to boost tourism into the country, is known as the Magical Kenya Open and is part of the European Tour. The 2022 edition tournament was played in March at the Muthaiga Club and was won, for the first time, by a Chinese golfer, Ashun Wu.
  • This year, Kenya Airways joined as a corporate partner and had aircraft fly past over Muthaiga on two days of the tournament and, as an official sponsor offered discounted rates to golfers and fans while ferrying in PGA officials working at the tournament. 
  • NCBA has the NCBA Golf Series with ten tournaments around the country that was in Kitale last week and will next be in Kampala, Uganda.  In 2021, the series had 13  tournaments that attracted 1,700 golfers. Some juniors golfers who participated won qualification to two international events – the Rome Classic (Italy) and the Big Five (South Africa).  
  •  The Safaricom Golf Tour has received sponsorship of Kshs 100 million, for a 14-leg tournament that will involve outreach to local communities and make the sport more accessible – it will rope in corporate and amateur players, juniors (play on Sundays), caddies (compete on Mondays) at the different legs. It aims to find new talent for the sport, especially young golfers, and winners of different legs will feature at the finale at Vipingo Ridge in August. The Vipingo Ridge course was launched in 2010 and continues to host several leading international golf tournaments. 
  • Also on the European Tour is the Magical Kenya Ladies Open which is played at the Vipingo course. The Kenya Tourism Board (KTB) is the main sponsor of the tournament which this year featured 90 golfers from 25 countries. The tournament also got a Kshs 20 million sponsorship from Safaricom’s M-Pesa who held a junior golf clinic.
  • Crown Paints and Prime Bank are part sponsors of the US Kids Foundation golf series along with Safaricom and NCBA. The three-year program will be run through the Junior Golf Foundation (JGF) to promote golf development through the training of up to 40 coaches across the country and supports local golf tours to introduce more young people to the sport. It has held events at Limuru and Muthaiga and will have more at Karen and Royal (Nairobi) all leading to a finale at the Muthaiga Golf Club in May 2022.
  • Kenya Ports Authority will have tournaments in different cities of its operations – Nairobi, Mombasa, Kisumu. 
  • The Tannahill Shield one of the largest amateur golf tournaments in the country is ongoing at the Royal Nairobi Golf Club this Easter Weekend. It is sponsored by Jamii Telecom, Rentco and Chipper Cash, a remittance company. 
  • In 2021, Absa Kenya sponsored the Savannah Tour Classic a new event created for the European tour in the recovery from Covid and was staged ahead of the Kenya Open. 
  • The Johnnie Walker Classic golf series resumed after eight years, sponsored by EABL’s The Johnnie Walker Classic golf series resumed after eight years, sponsored by EABL’s Kenya Breweries. “Road to Gleneagles” will have amateur and professional golfers compete at 20 clubs across the country ahead of the finale in May 2022 where the winning team will receive an all-expenses-paid trip to play at the Gleneagles in Scotland which is one of the top golf courses in the world. For the professionals, participation will help them to improve their competitiveness for the European tour events played in Kenya. 
  • Insurance companies including ICEA and Liberty (a Stanbic affiliate) also support golf as do other companies in the sector. 
  • EDIT: Amateur golfers are invited to enter the Race to Vipingo Ridge by registering and submitting scores achieved during “club nights” at their home clubs between 18 April and the end of June for a chance to win a chance to play in the finals at Vipingo Ridge, with their transport and accommodation careered for. Note, there is an entry fee for the qualifying rounds.
  • EDIT: NMG has the Nation Classic Golf Series again for 2022.
  • EDIT: I&M Bank has an offer to pay 95% of the membership fee for its customers eligible to join VetLab Sports Club, a popular golf club in Nairobi.

Turning Dreams into Hotels – Angama and Hemingways

From recent social media posts, we have two tales about how two award-winning hotels came to be built.

Angama: The story of Angama was published back in 2017 but was re-shared this week in a newsletter from the lodge. It was contained in a blog that was written by the founder on the putting together of finding the right partners and putting together a project team and how they managed to execute on a design and vision to build a 10,000 square meter lodge on a cliff in the Mara, in just ten months. This came after eight months of chasing funding.

Hemingways:  The story of Hemingways, is from an interview of the Chairman of Hemingways Holdings, Dicky Evans by journalist Joy Doreen Biira.

He narrates how they operated a hotel in Watamu on the Kenyan coast for 30 years before deciding that there was an opportunity to do a hotel property in the capital city of Kenya. Then, on to the search for an ideal location, acquiring the land, growth by acquiring other companies, working with planners and neighbours, sourcing environmental permits, utilities etc. all to build and fit out what became Hemingways Nairobi at a total cost $22 million. To do this, they also got some funding from I&M Bank, and also invested in other properties in the Mara and in Naivasha and are doing renovations and expansion into new apartments at Watamu.

The importance of partnerships comes in both stories; Hemingways at Watamu partners with other hotels in Nairobi, which don’t have properties as the Coast, to host tourists who want a  private luxury experience at the beach, while Angama, in another post, narrates how local airlines came together to reduce the flying time for their tourists moving between the Mara in Kenya and Serengeti in Tanzania to just a few hours – eliminating an extremely  long process of several flights through Nairobi, Kilimanjaro, and Arusha and airports.

In the two posts, there are unique insights you rarely hear local investors talk about such as how much money they put have invested into their projects, the process of acquiring land, and how infrastructure developments lead to new investment opportunities and possibilities. Also, the day-to-day running and management, and the use of expatriate project managers is a theme that runs through the stories of the two properties that were built quite fast and which are now receiving global accolades for excellence.

Some of the recent awards the hotels have been feted for include the “Best Resort in the Middle East and Africa” by Conde Nast Traveller for Angama, while Hemingways was named the “Best Hotel in Kenya” in three categories (top 10 hotel, top luxury, top service) by Trip Advisor.

edit: In June 2022, Angama announced a 10-suite facility at Amboseli, in partnership with Kimana, a community wildlife sanctuary owned by 844 families, who will receive $11 million over 25 years.

edit: In December 2022, Hemingways Collection announced their takeover of Eden Hotel in Nairobi.

M&A Moment: July 2017

Various recent deals in the last few weeks and months in East Africa – compared to 2016 and 2015

Banking and Finance: Finance, Law, & Insurance

  • Commercial Bank of Africa (Kenya) is acquiring 100% of Crane Bank Rwanda from DFCU of Uganda
  • Direct Pay Online Group acquired 100% of Virtual Card Service in Botswana and Namibia. This will be followed by the acquisition of 100% of VCS business in South Africa (via Balancing Act Africa)
  • Chase Bank suitors announced by the Business Daily – are led by Societe General, and State Bank of Mauritius (who have also just completed the acquisition of Fidelity Bank)
  • Barclays PLC sold 22% of Barclays Africa
  • KCB was linked to another bid for NBK, although the CMA denied any knowledge of such a deal.
  • Kuramo Capital, the largest shareholder of Transcentury is acquiring 25% of Sterling Capital stockbrokers, the second largest bond trader in the country
  • Diamond Trust to acquire Habib Bank Kenya for shares worth Kshs 1.82 billion (~$18 million). EDIT At the end of July, the Competition Authority approved the deal on condition that Diamond Trust retains at least 41 employees of Habib Bank post-transaction and the Central Bank communicated that the deal would be concluded on 1st August when Habib would cease to exist as a licensed bank.
  • The Competition Authority of Kenya has authorized the proposed acquisition of a minority stake of 10.68% of I&M Holdings by CDC Group PLC together with certain veto rights.
  • I&M Holdings also has announced the successful completion of a merger with Giro Commercial Bank
  • Carlyle to acquire Global Credit Rating Co. (South Africa)
  • Letshego Holdings Limited (Botswana) acquires afb Ghana
  • Atlas Mara to acquire 13.4% equity in United Bank Nigeria, from Clermont Group for $55 million, increasing its stake to 44.5%
  • Sanlam Group has completed the acquisition of a majority stake in PineBridge Investments East Africa Limited. PIEAL is a leading asset management company in East Africa with operations in Kenya and Uganda – and the competition authority approved this at the end of July.
  • EDIT Alexander Forbes Kenya to change name & brand (to Zamara) after a change of shareholding to comply with new pension law that caps foreign ownership to a maximum of 40%.

Beauty & Pharma/Chem

  • The Competition Authority of Kenya authorized the acquisition of Dan Pharmacie by Mimosa Pharmacy.
  • The Competition Authority of Kenya authorized the acquisition of Sole Control of Syngenta AG (Syngenta) by China National Agrochemical Corporation (CNAC).
  • The Authority excludes the proposed acquisition of 72% of the issued share capital of Chemserve Cleaning Services Limited by Eye Level Exposure Limited from Part IV of the Act .. (their) combined turnover of KSh. 138,076,904 is below the required merger threshold for mandatory notification
  • Abraaj Group gets approval to acquire 75% of Healthlink Management (Nairobi Women’s hospital?)
  • The Competition Authority of Kenya has approved the proposed acquisition of 100% of the issued share capital of Monsanto Kenya by Bayer Aktiengesellschar/KWA Investment. Businessman Chris Kirubi revealed that he holds a 45% stake in agrochemical firm Bayer East Africa.
  • The Competition Authority of Kenya has authorized the proposed acquisition of the shares in the Dow Chemical Company by Dowdupont Inc. and the Competition Authority of Kenya has authorized the proposed acquisition of the shares in E. I. Du Pont De Numerous and Company by Dowdupont Inc.
  • A local drug store is set to be acquired for Sh. 2 billion. Imperial Health Sciences, which based along Mombasa Road will be acquired by South African investment firm Mara Delta Property Holdings. “The facility will be leased back to Imperial Health Sciences on a 10-year triple net basis, denominated in US$ and guaranteed by Imperial Holdings Limited.”
  • The Competition Authority of Kenya authorised the acquisition by Kibo Plastic Packaging of a minority (14.02%) shareholding with controlling interest in Blowpast Limited.
  • EDIT Japanese Kansai Plascon Africa has acquired local paint maker Sadolin for Kshs 10 billion.

Food & Beverage

  • Africa’s largest Coca-Cola bottler- Coca-Cola Beverages Africa Proprietary Limited (CCBA) has acquired Equator Bottlers, the third largest Coca-Cola bottler in Kenya. Equator Bottlers, was previously a subsidiary of Kretose Investments Limited owned by the Shah family, has been one of several authorized Coca-Cola Bottlers, which supply products in the Western regions of Kenya. It was established in 1966 and is based in Kisumu. EDIT  At the end of July, the Competition Authority authorized the deal on condition that the merged entity retains at least 2,279 employees post-transaction and that Coca Cola file a compliance report in two years.

  • The Abraaj Group is to acquire 100% of Java House Group from Emerging Capital Partners – the story was first broken at Wallace Kantai’s blog and the deal is said to be worth about $130 million. Java House Group was established in Nairobi in 1999. In 2012, Emerging Capital Partners acquired a majority stake in the Company, with the founder retaining a minority stake. ECP has helped Java House grow from 13 shops in Nairobi into East Africa’s largest casual dining brand, building an ‘eat-out’ culture. Today, it has an unrivalled regional footprint of 60 stores across 10 cities in Kenya, Uganda and Rwanda.
  • Catalyst Principal Partners has, through a newly established firm, Britania Foods Limited, acquired the business and operations of Jambo Biscuits Ltd, being a leading biscuits manufacturer in Kenya with its flagship “Britania” brand.
  • The Competition Authority of Kenya authorized the acquisition of assets of Wanainchi Marine Products (Kenya) by One Holdings.
  • The Competition Authority of Kenya authorized the acquisition of Sosco Fishing Industries by One Holdings.
  • Distell, Africa’s leading producer of spirits, wines, ciders and ready-to-drinks (RTDs) continues to ramp up its investment on the African continent, with the acquisition of a further 26.43% in KWA Holding East Africa Limited (KWAL), Kenya’s foremost spirits manufacturer and distributor, from Centum Investment Company Limited. The African liquor giant now owns a majority shareholding of 52.43% in KWAL, having previously acquired a 26% stake from Industrial and Commercial Development Corporation (ICDC) in 2014.
  • Netherlands-based private equity firm DOB Equity announced that in which in December 2016 that it had acquired a stake in Kenya’s Countryside Dairy, a Nyahururu-based facility with a processing capacity of 100,000 litres of milk per day.
  • Amethis and Metier to acquire East African FMCG firm, Kenafric Industries.. Two private equity funds have bought a 40% minority stake in Kenafric Industries as the firm eyes regional growth…popular products under the confectionery and culinary segments include Fresh brand of chewing gum and Oyo food additive. It also manufactures snacks and ready-to-drink juices at its plant in Nairobi’s Baba Dogo. The business, started 30 years ago by Velji Punja Shah and his four sons, is looking to increase its coverage of other East African countries, saying it currently sells 45% of its products outside Kenya.  
  • EDIT: The Competition Authority of Kenya has authorised the proposed acquisition of indirect control of Weetabix East Africa by Post Holdings through its wholly-owned subsidiary, Westminster Acquisition.
  • EDIT:  Twiga Foods, the Kenyan business-to-business food supply platform announced today that it has successfully raised a Series A funding round including $6.3 million in equity and $4 million in debt instruments.
    • The round was led by Wamda Capital and includes Omidyar Network, DOB Equity, Uqalo, 1776, Blue Haven Initiative, Alpha Mundi, and AHL.
    • Today, Twiga is the largest distributor of several basic food staples in Kenya, having sold over 55 million bananas alone and delivering over 4,000 orders a week.
    • Additional to the Series A round closing, Twiga closed some $2 million in grant funding from USAID, GSMA, and others to support bolt-on farmer services, financial inclusion, and first of their kind domestic food safety initiatives.

Hotels/Tourism

  • Simba Corporation acquired a 35% minority stake in Hemingways Holdings and plans to grow from its current three properties: the Olare Mara and Villa Rosa managed by world leading hoteliers, Kempinski, and Acacia Premier Kisumu, as Hemingways is the parent company of three iconic properties that represent the definitive portfolio of luxury travel in Kenya: Hemingways Watamu, Ol Seki Hemingways Mara and Hemingways Nairobi. The transaction also includes Express Travel Group, a subsidiary of Hemingways that provides comprehensive and high quality travel management services through its international franchise partnerships with American Express Global Business Travel and Europcar International as well as through Hemingways Expeditions, a premium Destination Management Company. EDIT: The competition authority approved the deal at the end of July.
  • The Competition Authority of Kenya authorized the proposed acquisition of control of Abercrombie & Kent Kenya (Abercrombie) by Yan Zhao Global, from A&K Cayman L.P and other minority shareholders
  • Thomas Cook India acquired Kuoni Travel specialists in 17 countries (includes Private Safaris E.A. in Kenya)
  • Accor Hotels will relaunch Tune hotel under the ibis Styles brand.
  • Older hotels – 680 and Boulevard, two older iconic Nairobi hotels have been recently bought by the Deputy President, William S. Ruto.

Logistics, Engineering, & Agri-Biz

  • Isuzu will become a 57.7% shareholder in Isuzu East Africa through the purchase of General Motors’ shareholding in the business. The other shareholders will remain as Kenya’s Industrial and Commercial Development Corporation (20%), Centum Investments (17.8%) and Itochu Corporation (4.5 %). EDIT: At the end of July, the Competition Authority of Kenya authorised the deal on condition that the merged entity absorbs all 383 GMEA employees, continues after-sales service of all the vehicle brands, Isuzu and Chevrolet sold and leased by GMEA for duration of all the after-sales service contracts, honours all existing dealership agreements between GMEA and its dealers, and communicates to all GMEA customers on the continuation of after-sales service.
  • The Competition Authority of Kenya authorized the proposed subscription for 24.99% shareholding in Trans-Century with 100% of the redeemable preference shares in TC Mauritius Holdings by Kuramo Africa Opportunity Kenyan Vehicle.
  • The Competition Authority of Kenya authorized the transfer of 50% of the issued shares in Safal Building Systems to Mabati Rolling Mills.
  • The Competition Authority of Kenya has authorized the proposed acquisition of 100% of Kenya Kazi by Gardaworld
  • Rift Valley Railways (RVR), the company that runs the century-old Kenya-Uganda railway, has moved to court in a last-minute effort to stop the concession manager, Kenya Railways Corporation (KRC), from terminating its 25-year contract.
  • The Competition Authority of Kenya has authorized the proposed acquisition of Reunert Limited of 75.39% of the ordinary shares in Metal Fabricators of Zambia PLC.
  • The Competition Authority of Kenya has authorized the proposed acquisition of 40.7% of the ordinary shares and control of ARM Cement Limited by CDC Africa Cement.
  • Crown Paints to buy back 15% of its stock, the first company to do this.. now allowed by Kenya’s new companies law.
  • EDIT Athi River Mining is selling its Mavuno Fertilizer subsidiary to Omya and Pinner Heights to focus on its cement business.

Oil/Energy

  • German-based solar electrification firm Mobisol has acquired pay-as-you-go off-grid (PAYG) solar industry software firm Lumeter.
  • Hass Petroleum sold a 40% stake to Oman Trading International to fund growth in Eastern Africa
  • Tullow Oil plc sold stakes in Uganda to Total Oil for $900M, and will retain 10% of that and of a $3.5 billion pipeline through Tanzania
  • Vitol Africa gets approval to acquire 19.91% of Vivo Energy from Shell Overseas Investments
  • The Competition Authority of Kenya has authorized the proposed acquisition of indirect control in Dalbit Petroleum by Humphrey Kariuki Ndegwa.
  • The Competition Authority of Kenya has authorized the proposed acquisition of the retail petroleum business of Hashi Energy by Lake Oil
  • The Competition Authority of Kenya has authorized the proposed acquisition of the retail petroleum business of Hashi Energy Limited by Lake Oil Limited
  • The Competition Authority of Kenya has authorized the proposed acquisition of 100% of Gulf African Petroleum Corporation by Total Outre-Mer S. A. on condition that Total Outre-Mer S. A. comply with the following hospitality and employment conditions— including All agreements remain in force with relation to the Mombasa Terminal; and the merging parties are limited in the termination of employees of Gulf African Petroleum.
  • PIC South Africa will take up all shares not taken up in the Kengen Kshs 4.4 billion on offer. The South African government employees pension giant with $133 billion of assets will take up 351.2 million new shares at Kshs 6.55 each (totaling Kshs 2.30 billion) as other shareholders get diluted by 5.33% each e.g. The Kenya Government which was a 74% shareholder before, will have 70% afterwards.

Real Estate & Supermarkets

  • The Competition Authority of Kenya authorized the proposed joint venture between Helios Investment Partners and certain shareholders of Acorn Group.
  • Cytonn Investments Management (Kenya) to acquire a $10 million stake in Superior Homes.
  • Konza Tech City is seeking investors to apply for land to build campuses, BPO’s, offices, hotels, and student housing etc.
  • China Wu Yi acquires Sh530m Kilifi land.
  • In April last year, Mara bought a 45.5% stake in Naivasha-based Buffalo Mall for Sh. 440 million. Mara has valued its investment in Buffalo Mall at $6 million (Sh. 603 million), implying a capital gain of Sh. 163 million in less than a year. The mall now brings in 2% of the multinational’s total revenues and represents 2% of its assets. The property is however yet to make a profit, with the six months ended December showing a pre-tax loss of Sh.2.8 million.
  • EDIT  Uchumi expects to conclude a deal with an investor that is worth Kshs 3.5 billion of new shares.

Telecommunications, Media & Publishing

  • Vodafone sold a 35% stake in Safaricom to South Africa’s Vodacom (link)
  • The Competition Authority of Kenya has authorized the proposed acquisition of certain passive infrastructure of East Africa Towers by Kenya Towers.
  • Catalyst Principal Partners has acquired a significant minority interest in Kensta Group, a 52-year-old East African printing and packaging company Kensta Group manages a diverse set of companies within East Africa namely Transpaper (Kenya, Uganda, Tanzania, Rwanda), Express Automation (Kenya, Uganda, Tanzania, Rwanda), Vivid Printing Equipment, Fusion Inks, Zenith Rubber Rollers and Phiramid (Zambia).
  • Kenyan IT multinational Craft Silicon has acquired a Sh51.5 million minority stake in restaurants listing portal EatOut, marking its second major backing of a local tech company. Craft Silicon is a founder-shareholder of Little, which is also backed by local telco giant Safaricom. (via Business Daily)
  • Deal undone: Ghafla Kenya CEO Samuel Majani spoke about how a Ghafla merger with Ringier unraveled and on a lot of the intricacies of the issues such as exclusivity, assets & liabilities, dealing with partners & other shareholders, and on merging staff, customers & systems.
  • Deal undone: a Merger with JamboPay was unstuck after a court finding, and the founder of JamboPay, the firm that supplies Nairobi County’s e-payments platform, won a protracted battle against a rival firm over use of its trade name.
  • Mara Social Media acquired global Instant Messaging & communications platform “Nimbuzz” which has over 200 million users and is available for Android, iPhone, and Symbian, MIDP, Windows Phone, BlackBerry and PC & MAC clients
  • Film Studios has been acquired by MoSound
  • MTN is to acquire MultiChoice Africa – owners of @DSTV & GoTV
  • EDIT The Competition Authority authorised the proposed acquisition of fibre optic cable from Bandwith  & Cloud Services Group by Safaricom.
  • EDIT Safaricom’s $1 million Safaricom Spark Venture Fund announced its sixth and final investment in agri-tech startup iProcure – which seeks to increase agricultural output in Kenya, which has remained comparatively low to other countries due to challenges including access to and use of quality inputs. Other invests include FarmDrive, Sendy, and mSurvey.
  • EDIT IFC invests Sh619m ($6 million) in mobile tech firm Africa’s Talking with the funds earmarked for the company’s expansion in Africa beyond the current seven markets where it has a presence.

Other

  • The Competition Authority of Kenya has authorized the acquisition of Section Investment by Kisima Management.
  • The Competition Authority of Kenya has authorized the proposed acquisition of 43.8% of Kinetic Holdings by Catalyst Kinetic Investments.

$1 = Kshs 103

EAVCA: East Africa Private Equity Snapshot

Ahead of the 3rd Annual Private Equity in East Africa Conference, (taking place on June 15 in Nairobi) the East Africa Private Equity & Venture Capital Association (EAVCA) and KPMG East Africa released their second private equity survey showing increased funding and activity, and with a lot more opportunity for deals to be done.

They estimated that of the $4.8 trillion raised between by P/E funds globally between 2007 and 2016, about $28 billion was raised by Africa-focused funds and $2.7 (including $1.1 billion in 2015-2016) had been earmarked for investment activity in East Africa.

This private equity had funded over 115 deals in the period that were included in the survey. Out of these  the 115 deals, 23 were agri-business, 20 were financial services, 13 manufacturing, and 12 FMGC representing 59% of deal volume. The average deal size had also grown to the $10-15 million range, while in the initial survey it was below $5 million.

East Africa Private Equity Survey

Of the 115 deals, Kenya had 72 deals (63% of the total), Tanzania 19, Ethiopia 8, Uganda 12, and Rwanda at 4. Some of the large deals in the survey, by country, include:

• Rwanda: Cimerwa – PPC ($69M), Cogebanque ($41M), BPR-Atlas Mara ($20M), Pfunda Tea ($20M)
• Uganda: topped by oil deals CNOOC and Total SA (both $1,467 million), Tullow $1,350M, Total $900M, CSquared-Mitsui $100M, Sadolin-Kansai $88M
• Ethiopia: National Tobacco – Japan ($510M), Meta Abo-Johnnie Walker ($255M), Dashen-Duet ($90M), Bedele-Heineken ($85M) and Harar-Heineken ($78M), Tullow-Marathon ($50M)
• Tanzania: Africa Barrick Gold ($4,781 million), Tanzania – Pavilion ($1,250M), Vodacom ($243M), Export Trading Co ($210M), Millicom-SREI ($86M), Zanzibar Telecom-Millicom ($74M)
• Kenya: Safaricom-Vodacom ($2,600 million), Africa Oil-Maersk ($845M), I&M-City Trust ($335M), Ardan-Africa Oil ($329M), Kenya Breweries-EABL $224M, UAP-Old Mutual ($155M), ARM Cement-CDC ($140M), Wananchi ($130M), CMC-AlFuttaim ($127M), Essar ($120M)

P/E operations: There are about 72 funds operating/focused in East Africa (up from 36 in the first survey) with over 300 employees. 89% of the survey respondents have a local presence in East Africa.

Some of the fund companies that responded to the survey include Acumen, Abraaj, AfricInvest, AHL, Ascent, , Catalyst, Centum, CrossBoundary, Grofin, Emerging Capital Partners, Kuramo, Metier, Mkoba, NorFund, Novastar, Phatisa, Pearl Proparco, Swedfund, and TBL Mirror

Returns:  Of  the deals done, survey responders had an average IRR target was 22% while the actual IRR achieved was 19%.  There were 34 exits between 2007 and 2016, with increased recent activity; 2014 (had 7), 2015 (7) and 2016 (6). The preferred mode of exit is sale to a strategic investor (preferred by 78% while this mode accounts for 38% of exits) followed by share buy backs (32%), then sales to another P/E (21%).

Many of the funds in the region are still in early stages, and 54% have made nil returns to their investors. They surveyors estimate there are more opportunities for Africa private equity in health, education, retail, and manufacturing sectors.

Atlas Africa Exits

In axhe post today was a shareholder circular from Atlas Africa Industries. Its’ been online (PDF) for a few weeks and outlines Atlas plan to dispose of an Ethiopian project to another shareholder.

Ethiopia Venture

  • In December 2005, Atlas announced the acquisition of  East Africa Packaging Holdings Limited and its Ethiopian subsidiary TEAP Glass PLC with plans to build a new state‐of‐the‐art glass bottle manufacturing facility, on a 5.5 acre site located in Chancho, 45km north of Addis Ababa, Ethiopia (the “Chancho Project”)
  • (But) the Company’s progress was terminally undermined and derailed by the actions of the Ethiopian Revenue and Customs Authority (“ERCA”).. (and) .. was subjected to a complete injustice, through the summary removal of approximately US$2.4 million from TEAP’s bank account with the Development Bank of Ethiopia by ERCA (the “TEAP Claim Amount”).
  • In April 2017 disposal of the Chancho will be effected by the sale to Innovative Africa Investments Limited (“IAIL”) and Eagle Investments Limited, being independent shareholders.. the losses attributable to the assets being disposed of pursuant to the Disposal during the last financial period (12 months ended December 2015) amount to US$254,216.

This Ethiopia disposal and the resignation of I&M Burbidge Capital who terminated their investment advisory contract is to be voted on at the Atlas Africa AGM which will be held on June 20, in Guernsey, where the company is incorporated. It seems that the I&M Burbidg notified Kenya authorities and as a result of this, the shares of Atlas that are listed at the Nairobi Securities Exchange were frozen on May 12 this year, just a few days before the Ethiopia disposal was then announced.

At another AGM this week of the Nairobi Securities Exchange, itself a listed company, some shareholders took the opportunity to vent about the dismal performance of Atlas Africa whose share price had plunged sharply since it was introduced, and which was now beyond reach of its Kenyan shareholders.

Farewell Atlas: The circular notes that  The board (has) taken the decision to undertake a managed and controlled wind‐down of the group, with a view to ensuring that liabilities are settled and assets are realised whilst cash outlay is reduced, with a view to returning any surplus to shareholders in due time. As part of this process, the board also believe that the Company is likely to de‐list from GEMS, and further announcements will be made with a proposal in this regard, in due course.

But is Atlas Africa a shell? This Global Witness article is about how directors, hiding behind anonymous firms registered in tax havens, carry off a multi-million-dollar heists by selling assets they already control to shareholders of their listed companies at inflated prices. They never declare their secret ownership – and ordinary investors had no way of knowing.