Top deals making headlines this week

In focus this week: Naspers, Aveng, Absa, Investec and more.

Naspers

Naspers, Africa’s largest company by market capitalisation, announced on Monday that its video entertainment business, MultiChoice Group, will list on the Johannesburg Stock Exchange (JSE) on February 27, 2019.

Multichoice will list in the broadcasting and entertainment sector on the main board of the JSE.

The initial public offering follows Naspers’ announcement last year that it plans to list MultiChoice separately on the JSE and simultaneously unbundle the shares in the business to its shareholders.

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Aveng

South Africa’s construction firm Aveng said it has entered into an agreement with black-owned firm, Infinity Partners, to sell Aveng Water and Aveng Namibia Water for R95 million.

Aveng Water is a water treatment process engineering and project delivery business offering services from project development to long term operations and maintenance.

The sale is part of Aveng’s disposal of non-core assets following the company’s strategic review that was undertaken in February 2018. Aveng is in the process of repositioning its operations in fast-growing international markets. 

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AFIG 

Advanced Finance and Investment Group (AFIG), an African private equity fund manager, has completed an investment in Nigeria’s NEM Insurance, by acquiring 29.9 percent of the company's shares from some existing shareholders.

The value of the deal was not disclosed.

NEM Insurance is a top-tier non-life insurance company, which has had operations in Nigeria for over 60 years, and it recently entered the Ghana market. The company offers all classes of non-life insurance products to individuals and corporates in Nigeria. 

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Absa

French bank Societe Generale and South Africa’s Absa have joined forces to broaden their reach across the African continent.

Societe Generale and Absa Group signed of a Memorandum of Understanding to expand their activities through the development of a pan-African wholesale banking offering. 

Separately, Absa agreed to acquire Societe Generale’s custody, trustee and clearing services operated in South Africa. Societe Generale has operations in 19 African countries, mainly in Western and Northern Africa.

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Edcon 

South Africa’s Edcon is in talks with the Public Investment Corporation (PIC) to raise funding in a bid to rescue the struggling retailer, according to a report by local newspaper Business Day. 

The PIC, which manages about R2 trillion on behalf of government employees and other social funds, confirmed to Business Day that it was in talks to rescue Edcon. 

Edcon didn’t disclose the funding it might receive from the PIC but estimates are pegged at R3 billion.

Edcon has struggled to survive South Africa’s retail market, which has seen intensified competition from international retailers Zara and H&M and consumer spending that is in the doldrums.

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Tiger Brands

Investment holding group Brimstone announced that it will acquire eight million ordinary shares in South African fishing company Oceana shares from Tiger Brands, a JSE-listed packaged-food maker.

The eight million ordinary shares represent 5.9 percent of Oceana’s shares in issue. The purchase of shares will raise Brimstone’s shareholding in Oceana to 22.88 percent.

The sale of shares follows Tiger’s announcement in December that it will sell its 42.1 percent stake in the fishing company, as it is not core to its food and drinks business.

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Berkshire Partners 

South Africa’s data centre operator, Teraco Data Environments, will be acquired by Berkshire Partners, a Boston-based investment firm.

Berkshire has entered into an agreement with Teraco to acquire a majority stake in the company. “The Permira funds, an existing shareholder, will remain a significant investor,” said Teraco.

Teraco said the Permira funds initially backed a Teraco management buyout in December 2014 and in that time the business has multiplied its capacity more than six times. The deal is subject to the approval of the Competition Commission, South Africa’s competition watchdog. The deal is expected to close in the first quarter of 2019.

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Investec

The U.K. Climate Investments (UKCI) has announced that it will invest R500 million in Revego Africa Energy Limited, an investment vehicle dedicated for renewable energy projects in Africa.

Investec Bank Limited, which is a founding shareholder of Revego Fund Managers and the manager of the investment vehicle, has also made a conditional investment of R500 million. Both UKCI and Investec’s commitments will be realized once the investment vehicle has been listed.

The main purpose of the investment vehicle will be to acquire equity in operational renewable energy projects across sub-Saharan Africa. It will also help the developers in the installation of new clean generation capacity and recycle capital in established green energy projects.

The investment vehicle is likely to be listed on the Johannesburg Stock Exchange in the first half of 2019. This will generate an interest from the institutional investors and demonstrate the investment potential of the region’s renewable energy sector.

The targeted initial listing size of the investment vehicle is approximately R2 billion.

Entelect 

South African software engineering and solutions company, Entelect, has entered into an agreement to purchase a majority stake in Fixx iT, a software engineering and professional services company headquartered in Zeist, Netherlands.

This investment is expected to continue the expansion of Entelect in international markets.  It also further opens opportunities for its customers to have exposure to its international exposure and service offering.

Pending the completion of the purchase agreement, Entelect will take a controlling, majority stake of 87.5 percent of Fixx iT.

The value of the deal was not disclosed by the company.