African Rainbow Capital grabbed the headlines in Africa’s private capital markets last week by unveiling its plans to list some of its portfolio on the Johannesburg Stock Exchange in September. ARC Investments, as the listed entity will be known, will include almost half of ARC’s financial services assets and all of the firm’s non financial services interests which include its investments in the agriculture and telecommunications sectors. The offering is expected to raise about R4 billion or approximately $307 million.
The other private equity-related deals of the week were much smaller in scale. Long4Life, a listed investment holding company, which was launched earlier this year by BidVest founder Brian Joffe, has agreed to acquire Inhle Beverages from the Botha family for a maximum consideration of R360 million or $27 million. Inhle is now the second largest beverage co-packaging business in South Africa, employing some 300 people, and the deal is an opportunity, in Joffe’s words, “to build a beverage business of scale, through both organic growth and bolt-on acquisitions.”
There was a trio of DFI-related investments of note last week. Of the three, the largest sees the IFC considering a $40 million senior secured A Loan to Acorn Holdings, a new real estate development firm which is owned on a 50-50 basis by entities backed by Acorn Investments and Helios Investment Partners. The proposed financing supports a $72 million project to build 3,800 units of student housing in Nairobi.
In the second, The Nordic Development Fund and Norfund have agreed to invest a combined total of $19 million in an energy-focused investment platform owned by development asset manager responsability Investments. The capital will be targeted at small and renewable energy projects across sub-Saharan Africa, typically with up to 50MW in generating capacity.
And thirdly, Arise, the financial services platform launched earlier this year, is taking over the stakes in NMBZ Holdings belonging to FMO and Norfund. Arise now owns 69.14 million shares in the Zimbabwean banking group, which at the market close on Friday, values the stake at approximately $3.7 million.
In the venture space, there were two deals reported. Secha Capital VCC, a 12J investment vehicle, is backing Stoffelberg Biltong in an undisclosed deal. Secha Capital views South Africa’s biltong market as being large, defensible, fragmented and, surprisingly, but importantly, dormant. As such, the firm sees an opportunity to build a producer of high quality products and reinvigorate the market.
Feastfox, a mobile app which caters to what it terms the “spontaneous eating out” market, has raised $175,000 from a group of angels, among whom are several Silicon Valley investors making their first Africa-related investment. The app was developed initially at Stanford University in Palo Alto and now has additional presence in Cape Town and Budapest. The city, restaurants and consumers of Cape Town are seen as a critical component of the app’s proof of concept.
Finally, we’re publishing a couple of interesting perspective pieces from law firms that we found last week. Hogan Lovells discusses whether Africa’s mining and natural resources sector is becoming uninvestable. And Webber Wentzel outlines how South Africa’s private equity landscape needs to adapt if it is to facilitate seamless investment and divestment in the continent’s jurisdictions.