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The African continent owns 20 percent of the world’s land and 15 percent of its population. This makes it the world’s second-largest and second-most-populous continent. But at a mere 4 percent global gross domestic product (GDP), the African economy is…

The African continent owns 20 percent of the world’s land and 15 percent of its population. This makes it the world’s second-largest and second-most-populous continent. But at a mere 4 percent global gross domestic product (GDP), the African economy is overshadowed by Asia in the east and to a lesser degree by South America in the west.

As per the IMF report, World Economic Outlook in April 2015, GDP of advanced economies was 1.8% but was more than 5% for Africa in the year 2014. Though high-growth of African GDP along with increasing diversification of its economy provides a sound ecosystem for global M&A activity, the situation is otherwise. As per BCG analysis in the report African Challengers, 65% of M&A transactions of leading companies in Africa remain actualized within the continent as compared to 20% to 40% for BRIC countries in their home continents.

In terms of deal realization statistics from the African segment, TMT and financial services sectors account for the second largest share in both volume of deals (about 20%) and value (more than 25%) after energy, mining and utilities sectors, which have been traditional performers from the continent.

According to global deal transactions, since the year 2006, the increase in cross border M&A deals in Africa has mostly West European and Asian acquirers, accounting for first and second largest shares in deal volumes.

For capital providers on BankerBay:

BankerBay has 40 funds and strategic investors looking at investments in Africa right now, with over $98 billion AUM of funds and transaction size of acquirers) in deployable funds. Reflecting the increasing desire for cross border strategic investment, 43 percent of this investment interest is coming from West Europe and over 40% from Asia.  70% of the institutional financial investors are from developed markets and Asia.

For capital seekers and business sellers on BankerBay:

On BankerBay, 29 live sell side deals are from Africa with total deal value in the range of $2 billion–2.1 billion, from which 13 deals have already received expressions of interest from our buy side firms.

We have companies looking for growth capital with the average amount of capital required being $52 million as well as full buyout opportunities with an average turnover of per company of $42 million.

Below infographics showcase deal information of sell side deals on BankerBay from Africa.

Chart 1:

From 2006, Africa has witnessed a deal surge from TMT and banking sectors, which reflects on BankerBay, with about 55% share of the deal value.

Source: BankerBay Deal Analysis

Chart 2:

BankerBay has twelve live project finance deals which are seeking capital. The average amount of the capital required for the project finance deals is more than $110 million. Real estate and infrastructure sectors have about 90% share of the deal value.

Source: BankerBay Deal Analysis

 

BankerBay says:

As per the report of Market Intelligence, M&A in Africa: A regional overview, November 2014, Africa has a buoyant future for cross border M&A. Along with the traditionally attractive sectors like energy, mining and utilities there are other sectors like consumer goods and infrastructure, financial services and telecommunications which are a growing area of focus for international investors. With the steady flow of buy side interest on BankerBay from both developed and emerging markets for investment in Africa, we will continue to ensure the deal pipeline and investor interest for Africa as whole is represented and facilitated well, always helping the right funds and strategic investors see the right opportunities.

To discuss this further, or for any additional information on this blog post, get in touch with us here: blog@bankerbay.com

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