Private Equity disposals on the rise in Africa which means more opportunity for growth and investment
During 2014, the Private Equity firms played a vital role in the development of African regions where they would acquire a company with a controlling stake, operate and grow the company within their investment strategy timeframe, typically five to ten years, and thereafter, sell their well-developed portfolio company to either another private equity firm, a non-private equity entity or through a listing on the local African stock exchange.
Research shows that most of the disposals made by the Fund Managers in 2014 were to non-Private equity firms which is a positive reflection of the different types of local and global investors looking to invest in the African region.
“Fund managers are showing more interest in exiting their investments through Initial Public Offerings (IPO), proving that the African economies are developing and becoming more stable”, said Watkins. There was a high record of exit activity in North and East Africa, particularly in Egypt, Kenya and Uganda with an aggregated disclosed deal value of more than US $3 389 million (see attached table). This total excludes the non-disclosed deal values. These disposals were across various sectors including Manufacturing, Financial Services, Transport & Logistics, Electricity & Energy distribution, to name a few, with the Financial Services sector being the most dominant.
Watkins also states that the South African private equity market has also showed high activity levels of disposals with transactions like Ethos Private Equity & Actis LLP and their disposal of Alexander Forbes through a listing on the Johannesburg Stock Exchange and Ethos Private Equity disposing its stake of Tiger Automotive Group to the Carlyle Group and Old Mutual Private Equity for an undisclosed amount.
A summary of some of the 2014 disposals are listed below by region and include Large Cap, Mid Cap and Small Cap exits:
Written by Warren Watkins, Partner & Head, Private Equity – Southern Africa. Download full document here: News from the FRONT
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