Deal making in Africa’s private equity market has exhibited strong recovery in the first half of 2011, as investors put capital to work.
At least 12 deals were revealed to have been closed in the first five months, just seven short of 2010 full-year totals, according to Preqin data. Disclosed values touched $1.8 billion, about three times the $0.6billion reported in the whole of 2010. At least five other investments are set to be closed by June this year, according to Private Equity Africa sources.
“We have been very busy this year,” said a partner at an Africa-focused private equity investment company, in London. “We have already done more deals in 2011 than we did in the whole of last year,”
This year’s deal values have been bolstered by Nigeria’s financials services sector which saw ACA Capital back a $750million Union Bank deal. Vine Capital Partners also transacted a deal in the sector, leading a consortium of investors in the recapitalisation of Lagos-based Afribank.
The first half of the year also saw Adlevo Capital execute the first acquisition out of its specialist technology fund, backing a $110 InterSwitch deal alongside Helios. Also active in the financial technology segment was Sarona, which injected $0.3m in Lusaka-based mobile transactions company Mobile Transactions Zambia.
Citadel Capital fanned North-African deal making, by backing a $39.5million turnaround investment in Tenth of Ramadan for Pharmaceuticals and Diagnosing products (Rameda). The deal was structured through its subsidiary Sphinx Private Equity Management. Elsewhere, Horizon Equity Partners exited its financial technology portfolio company, Peresys in a $56.4million trade sale, generating 14 times returns on cost.
This year sees aggregate deal making values return to levels last seen in 2008. Deal making in Africa’s private equity market reached its peak in 2007, when investors closed $7billion across 34 deals, according to Preqin data. Since then, both deal values and volumes have been on the decline – with last year recording the lowest number of deals since 2006.