- East Africa’s notable company mergers and acquisitions have been recognised at this year’s DealMakers AFRICA Awards
- DealMakers AFRICA tasked advisory firms to nominate and submit notable mergers and acquisitions for two categories, namely East Africa’s deal of the year and East Africa’s private equity deal of the year
- DealMakers AFRICA ultimately picked KCB Group’s acquisition of Trust Merchant Bank (TMB) as the region’s deal of the year
- DealMakers AFRICA named Naivas’ stake exit the region’s Private Equity Deal of the Year
East Africa’s notable company mergers and acquisitions have been recognised at this year’s DealMakers AFRICA Awards gala held in Nairobi, following a two-year break of a physical event due to COVID-19 restrictions.
The awards ceremony, held at Villa Rosa Kempinski, also recognised advisory firms that were involved in the execution of the mergers and acquisitions and general corporate finance. The firms were contracted either as financial advisers, legal advisers and tax advisers.
DealMakers AFRICA tasked the advisory firms to nominate and submit notable mergers and acquisitions for two categories namely East Africa’s deal of the year and East Africa’s private equity deal of the year. From these DealMakers AFRICA generated a shortlist and ultimate winner in each of the two categories.
In the first category, DealMakers AFRICA shortlisted five deals. These were; KCB Group’s acquisition of Trust Merchant Bank (DRC), disposal by HIL Holdings of Hillcrest International Schools to Braeburn Group and Metro Group’s acquisition of a majority stake in Metropolitan Hospital Holdings.
Others were KITEA Group’s acquisition of a majority stake in Furniture Palace and the disposal of Golden Jubilee to Kasada Capital Management.
DealMakers AFRICA ultimately picked KCB Group’s acquisition of Trust Merchant Bank (TMB) as the region’s deal of the year, while the rest were named runners up in no particular order.
Commenting on the win, Marylou Greig, the head of DealMakers AFRICA said the acquisition is one of the region’s biggest deals to be executed in East and Central Africa over the past few years.
“It provides KCB with an opportunity to tap the immense trade opportunities that come with the DRC’s recent admission to the East Africa Community (EAC),” she said.
Companies that offered advisory services to the acquisition of TMB were Deloitte, Bowmans, Stein Scop and Ernst & Young (EY).
To determine the winner, DealMakers AFRICA considered various factors which included the execution complexity of the deal, its size and the potential value creation.
Under the East Africa private equity deal of the year category, advisory firms nominated private equity deals, which were reduced to a shortlist of three deals. These were; Amethis Retail and Gakiwawa Family Investments’ exit of a 40% stake in Naivas, Actis exit of a 36% stake in AutoXpress to AfricInvest and IFC and LeapFrog’s partial exit of Goodlife Pharmacies.
KCB Group shareholders approve Trust Merchant Bank SA acquisition
DealMakers AFRICA named Naivas’ stake exit the region’s Private Equity Deal of the Year, while the rest were named runners up with no particular order.
Greig said the exit from Naivas by a host of investors, including the Gakiwawa family, was the most notable in the category, due to the magnitude of the deal.
“The acquisition of a 40% stake in Naivas by a consortium led by Mauritian conglomerate IBL Group and companies, including Proporco and French Fund, was worth KSh 18.25 billion. The amount represents almost three times the price paid by the minority shareholders just two years prior in 2020 when they acquired a 31%,” Greig disclosed.
The firms that advised on the purchase of a stake in Naivas were Rothchild & Co., Bowmans, Benoit Chambers, Kaplan & Stratton, PwC and EY.
The awards committee also named the combination of the African operations of Sanlam Group and Allianz in its Special Recognition Award of 2022.
DealMakers AFRICA said that the transaction is expected to reshape Africa’s insurance industry, as it involved 27 countries and 12 overlapping countries. Advisers included teams from across the continent.
The Deal of the Year and Private Equity Deal of the Year along with the advisory league tables for West Africa were also announced at the event.
Overall, West Africa continued to dominate with the highest deal value of mergers and acquisitions at US$3.29 billion, with Nigeria the centre of activity with 135 deals. It was followed by East Africa, which recorded deal value in aggregate of $2.88 billion.
Kenya was the most active of the East African countries, recording 123 deals of the 162 for the region. Total local mergers and acquisition deals sealed in Kenya in 2022 are valued at US$1.1 billion.
At the same time, the company noted that there were a total of 687 local deals on the continent, excluding South Africa, valued at US$17,53 billion, almost 15% lower than 2021’s deal value.
Greig attributed the slowdown in activity witnessed, especially in the second half of the year, to macroeconomic factors such as the war in Ukraine, inflationary pressures and rising interest rates.
She added that the factors are likely to keep activity subdued for now, impacting market sentiment, valuations and the cost of debt financing.
“On the bright side, it is important to note that the numbers are now back to their pre-COVID levels,” she said.
DealMakers Awards were launched in 2000 in South Africa and were introduced to the rest of the continent in 2008.