Private equity investors closed $3billion worth of deals in 2011, with South Africa and Nigeria attracting the most capital, according to Preqin data.
Deal making was bolstered by a number of last minute closures in December, including the $70million investment in South Africa’s Umcebo Mining led by US-based investors Black Rock and First Reserve Corporation.
China-based Hanhong Private Equity also closed a $16.9 million transaction in the month, backing Stonewall Mining. Part of the financing went into the bolt-on acquisition of Transvaal Gold Mining Estates in South Africa.
South Africa continued to account for the bulk of the deal making in 2011, with investors closing $1.86billion worth of transactions in the country. Nigeria came in second with about $1billion, lifted by the $750 million investment in Union Bank by a consortium led by Africa Capital Alliance (ACA). The deal is the largest private equity transaction across Africa in 2011.
Interestingly, the year saw a buzz of deal making from US-based private equity houses that are traditionally not focused on Africa. In addition to Black Rock and First Reserve closing the Umcebo transaction, Bayside Capital sealed a number of deals including an undisclosed investment in GDP and GDP Tech Tunisia, alongside its parent company HIG Capital. Bayside additionally seized opportunity to close a restaurant deal in October, backing Hooters of South Africa.
ACA’s Union Bank deal also drew in a number of US-based investors, including The Keffi Group, which invested through Keffi Group VIII, a vehicle backed by global private equity giant JC Flowers. Discovery Group, a US-based hedge fund manager, also backed the Union Bank deal. Compass Capital was also in the market, backing Egypt’s 10th of Ramadan for Pharmaceutical & Diagnostic Reagents Company in January.
Africa also saw some interesting deals from China-based private equity players including the China Investment Corporation which bought Shanduka from Investec et al. Hony Capital was also active in the market, reportedly agreeing to commit up to $100 million to Madagascar-based iron ore mining company Wisco Guangxin Kam Wah Resources in February.