WITH the rise in private equity firms and capital chasing large deals in east and west African markets, law firm Bowman Gilfillan advised there were opportunities to do small and mid-sized transactions with family-owned businesses.
The view is that more value could be created if dealers took the effort to find good small and medium-sized companies and transform these into bigger entities that can be bought with bigger cheques.
"There is no shortage of transactions. There seems to be a view that people are battling to find deals. The deals are there but not as big as SA. It is smaller deals and many of these companies are family businesses," said John Bellew, the head of private equity at the law firm.
"A lot of capital that has been raised is looking for bigger transactions. That creates a gap for people that specialise in the mid-market. If you are successfully invested in a mid-market deal and if you have managed to grow that company … you can sell it as a bigger company."
He said there were opportunities to do deals with companies valued at $10m-$50m.
Mr Bellew, who is working on deals in Nigeria and Kenya, said there were a lot of opportunities and capital being allocated for the infrastructure, fast moving consumer goods, agri-business and real estate sectors.
Deloitte’s 2015 Africa Private Equity Confidence Survey noted that although Africa attracted a smaller proportion of global private equity money, "interest has grown buoyed by oil and gas discoveries and a growing consumer class".
The survey noted that in West Africa some deal makers were attracted by Nigeria’s population of about 180-million people. In East Africa, it noted that investors were optimistic about Ethiopia and Kenya. It said 54% of respondents expected economic conditions in Ethiopia to improve in the next year.
Deloitte said the fact that the Dubai-based Abraaj Group had raised $990m was a sign of interest in the continent.
RMB Corvest, a FirstRand private equity division, plans to invest R500m to R1bn by next June with more capital allocated to businesses in Africa.
Research by the African Private Equity and Venture Capital Association showed that $8.1bn worth of private equity deals were made in Africa last year, second only to the $8.3bn of deals concluded in 2007.
Bowman Gilfillan advises that small and mid-sized transactions with family-owned businesses creates more value when chasing deals in east and west Africa. Picture: KOPANO TLAPE
WITH the rise in private equity firms and capital chasing large deals in east and west African markets, law firm Bowman Gilfillan advised there were opportunities to do small and mid-sized transactions with family-owned businesses.
The view is that more value could be created if dealers took the effort to find good small and medium-sized companies and transform these into bigger entities that can be bought with bigger cheques.
"There is no shortage of transactions. There seems to be a view that people are battling to find deals. The deals are there but not as big as SA. It is smaller deals and many of these companies are family businesses," said John Bellew, the head of private equity at the law firm.
"A lot of capital that has been raised is looking for bigger transactions. That creates a gap for people that specialise in the mid-market. If you are successfully invested in a mid-market deal and if you have managed to grow that company … you can sell it as a bigger company."
He said there were opportunities to do deals with companies valued at $10m-$50m.
Mr Bellew, who is working on deals in Nigeria and Kenya, said there were a lot of opportunities and capital being allocated for the infrastructure, fast moving consumer goods, agri-business and real estate sectors.
Deloitte’s 2015 Africa Private Equity Confidence Survey noted that although Africa attracted a smaller proportion of global private equity money, "interest has grown buoyed by oil and gas discoveries and a growing consumer class".
The survey noted that in West Africa some deal makers were attracted by Nigeria’s population of about 180-million people. In East Africa, it noted that investors were optimistic about Ethiopia and Kenya. It said 54% of respondents expected economic conditions in Ethiopia to improve in the next year.
Deloitte said the fact that the Dubai-based Abraaj Group had raised $990m was a sign of interest in the continent.
RMB Corvest, a FirstRand private equity division, plans to invest R500m to R1bn by next June with more capital allocated to businesses in Africa.
Research by the African Private Equity and Venture Capital Association showed that $8.1bn worth of private equity deals were made in Africa last year, second only to the $8.3bn of deals concluded in 2007.
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