Business
Value of private equity deals in Africa increased by 11% in 2012
Despite a drop in the number of private equity deals in Africa in 2012, the value of the deals increased.
The rise in value is attributed to the industry’s appetite for quality over quantity.
Data by Private Equity Africa, a funds deals monitor and Preqin, a research company focusing on funds indicates that the value of deals reported in 2012 was US$3.5 billion, an 11 percent increase from US$3.1 billion reported in 2011.
The number of private equity deals completed in 2012 was however lower at 32, from 39 announced the previous year. It was the fourth successive annual rise in aggregate deal value in Africa, according to preliminary Preqin data.
The business services sector took most of the deals accounting for 72 percent in value, and 30 percent in volume.
North Africa had the top deals in the sector, most notably the International Finance Corporation’s US$204 million investment in Morocco-based bank, Banque Centrale Populaire (BCP).
Food and agriculture was second taking up 24 percent of the deals reported. The top deals in this category included Carlyle’s US$210m Export Trading Group (ETG) deal, in partnership with Standard Chartered Private Equity (SCPE) and Pembani Remgro Infrastructure Managers.
Morgan Stanley Alternative Investment Partners partnered with Capitalworks Equity Partners in an investment in South Africa’s Rhodes Food Group. The deal value has not yet been disclosed.
There was also a secondary buyout when Aureos sold Zambia-based agribusiness Golden Lay to Phatisa for US$24 million.
Healthcare and industrials were the third most active sectors, each bringing in 12 percent of the volume.
Media, retail and telecommunications jointly held the fourth slot with 6 percent of the deals each.
Regionally, southern Africa was the most active with 40 percent of deal activity. West Africa and North Africa brought in 18 percent each, closely followed by East Africa with 15 percent.
Private Equity Africa and Pequin however noted that figures for the 2012 deals exclude African Capital Alliance’s US$500 million buy into the Union Bank of Nigeria, which was counted in the 2011 deal making data.
Source: The East African