Africa Deal Tracker September 2020

In association with African Business Magazine, market leaders in providing country supplements, industry reports and market intelligence on Africa.
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Deal news

Vital Capital invest $4.9m in Kenya agribusiness SMEs

Cyprus-based private equity firm Vital Capital will invest up to Sh535 million ($4.9m) in small and medium agribusiness enterprises in Kenya in partnership with the US government’s Kenya Investment Mechanism (KIM) that was set up to help firms affected by the Covid-19 pandemic. Vital Capital managing partner Nimrod Gerber said that the firm was looking to create at least 500 jobs through this investment, whose funds will be drawn from its Sh1 billion Vital Impact Relief Facility (VIRF).

Atlas Mara Zambia provides relief to integrated sugar producer in light of CoVID-19 induced shocks.

Atlas Mara Zambia as part of its COVID-19 support initiative has financed Consolidated Farming Limited through a USD9m Bills Discounting Letter of Credit transaction. Under this transaction, the Bank purchased its own accepted bills from CFL’s key suppliers of fertilizers, pesticides and refinery equipment. The facility will ensure that Consolidated Farming Limited is given the much needed cashflow relief until the next crop cycle while ensuring that suppliers of fertilizers, pesticides and refinery equipment get paid on time so that there is no disruption in supply for the new crop.

The relief provided will also enable CFL invest into a mini off-grid power plant that will reduce the company’s reliance on the national grid as well as avoid production disruption in the wake of the recent and on-going power deficit that has plagued the Zambian economy.

Komaza raises $28m in equity funding co-led by Novastar Ventures & Dutch development bank FMO

Komaza has secured a first close of $28m of the company’s planned $33m Series B equity financing round with Novastar Ventures East Africa Fund. Komaza is a forestry company designed to get Kenyan smallholder farmers out of poverty and to address a large and fast-growing wood market in Africa. Many smallholder farmers in Africa leave large parts of their land untouched, and only plant what they need to survive. Komaza offers these farmers the option to plant fast growing trees, like eucalyptus and melia (a native, drought resistant species) on their untapped parts of land.

This provides farmers with the opportunity to generate additional income over a longer period of time. FMO invested USD 7.5 million. FMO’s investment is funded by the Dutch Fund for Climate and Development (DFCD).

Vantage Capital provides $5 million of funding for Alleyroads, one of South Africa’s leading affordable housing developers

Vantage Capital, Africa’s largest mezzanine fund manager, announced that it has provided $5 million of mezzanine funding for the development of Kayalane Heights, a first-of-its-kind affordable housing development located in Lebowakgomo, Limpopo. The promoter of the transaction is the Alleyroads Group, a leading South African black-owned property development company led by Ivan Pretorius. Since its inception in 2009, Alleyroads has built more than 3,000 residences across South Africa including over 1,500 affordable homes.

LeapFrog Strategic Africa Investments (LSIA) has acquired a 24% stake in ICEA LION Insurance

The investment in ICEA LION Holdings will be made by Eastern Africa Holdings, a wholly LSAI owned special purpose entity. The Group is primarily involved in insurance and asset management across East Africa.

Futuregrowth Asset Management invests in SweepSouth, a South African online home services firm

Futuregrowth via its Development Equity Fund has invested in SweepSouth, a disruptive online platform for booking, managing and paying for home cleaning, and now a variety of other services.

CDC invests $100m into new African fund by Helios

CDC Group, the UK’s development finance institution, has committed $100m to Helios Investors IV, the fourth private equity fund raised by Helios Investment Partners. Helios Investors IV, a pan-African generalist fund will invest in and build market-leading companies across the continent. CDC’s investment will support recovery from the COVID-19 pandemic by boosting economic growth across the continent. The investment also contributes to meeting the UN’s Sustainable Development Goal 8 for decent work, job creation and economic growth.

IFC invests EUR25mn in Ivorian bank NSIA Banque Côte d’Ivoire

IFC, a member of the World Bank Group, today announced a EUR25mn, one-year senior loan to NSIA Banque Côte d’Ivoire (NSIA), allowing the bank to extend new trade-related or working capital loans to companies whose cash flows have been disrupted by the Covid-19 pandemic.

Deal opportunities

Quasi-equity and debt for a Malawi-based dairy processing plant

A Malawi-based dairy processing plant is set to engage in the business of procurement, processing and sale of milk and milk products. Supported by Nairobi-headquartered transaction advisory firm, Finaltus, the Company is keen on raising debt to operationalise existing equipment for a non-UHT plant alongside quasi-equity for expansion of the processing plant to include a UHT plant.

The food processing industry, especially the milk processing market in Malawi remains largely untapped and offers great potential. Malawi’s milk consumption level per capita is estimated at 4 to 6 kg/capita/year, which is lower than the African average of 15 kg/capita/year and significantly lower than the WHO recommended intake. The project aims to involve and benefit 2,400 smallholder farmers.

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