Private  Equity  Exits  in  Africa  

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In  this  slideshow:  

• Typical  and  attractive  exits  in  Africa• Forms  of  investment  realizations• Minority  ownership  maintenance• Sizing  up  Africa’s  largest  markets

Informed  by  EY  and  AVCA’s  2013  African  Exits  

African  PE  has  a  strong  history  of  exits  

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“The  exit  is  a  reality  in  Africa,  especially  in  North  and  South  Africa  but  also  in  the  sub-­‐Saharan  region—and  the  returns  are  also  there.  If  I  go  back  to  pre-­‐2006,  our  average  multiple  was  around  1.7.  Afterward  it  was  around  2.5.”  

-­‐Ziad  Oueslati  of  AfricInvest-­‐TunInvest  Group  

Trade  sales  are  the  predominant  form  of  investment  realization  

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A  recent  study  of  African  exits  by  EY  and  the  Africa  Venture  Capital  Association  con[irmed  that  data.  Trade  buyers  accounted  for  half  of  all  exits  from  2007  to  2012.  The  study  further  revealed  that  regional  trade  buyers  are  a  growing  force.  Between  2010  and  2012,  sales  to  regional  trade  buyers  accounted  for  half  of  all  sales  to  trade  buyers.  That’s  up  from  the  2007–2009  period,  when  local  trade  buyers  were  more  dominant.  

Basic  governance  improvements  can  transform  African  businesses  

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“We  see  a  lot  of  the  private  buyouts.  It’s  typically  family-­‐owned  businesses  that  need  to  be  transformed  into  a  corporation.  So  a  lot  of  the  value-­‐add  done  by  private  equity  is  putting  in  place  governance  in  running  the  companies.”  

-­‐Sandile  Hlophe,  EY  

Minority  ownership  requires  constant  communication  and  guidance  

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It’s  more  dif[icult  for  a  private  equity  [irm  with  a  minority  stake  to  exert  in[luence  and  impose  governance  on  a  portfolio  company.  Often  it’s  impossible.  

Capturing  consumer  growth  means  attractive  exits  to  strategics  

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“The  middle  class  is  growing,  and  the  internaConal  investors  know  that  the  consumer  story  in  Africa  is  a  real  story,  because  middle-­‐class  growth  is  sCll  in  the  beginning  and  it’s  going  to  conCnue.”  

-­‐Ngalaah  Chuphi,  Ethos  Private  Equity  

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