Carlyle eyes new opportunities in Africa after making first exit

Carlyle Group

US-based private equity firm Carlyle Group is looking at a number of investment opportunities for its African fund after it made its first ever exit on the continent this month, its top official said.

Marlon Chigwende, managing director and co-head of the Carlyle Sub-Saharan Africa Fund, said the $700 million investment vehicle was looking to increase its investments on the continent after it exited Export Trading Group, a Tanzanian-based continental supply chain manager.

Carlyle, which has so far made at least five buys in Africa, has been taking on partnerships in its investments on the continent including with Africa’s richest man Aliko Dangote, to buy in energy infrastructure, and with ex-Barclays chief executive Bob Diamond to buy the banks stake in Africa.

“We are very busy. Potentially we might close a deal [by the end of this year], a lot depends on the discussions we are having with potential vendors of the businesses. We are in a detailed diligence on a number of opportunities,” Chigwende told Africa Global Funds.

Marlon Chigwende, managing director and co-head of the Carlyle Sub-Saharan Africa Fund
Marlon Chigwende, managing director and co-head of the Carlyle Sub-Saharan Africa Fund

“What you are looking for is good businesses that are well run, that you can buy at an attractive price. For our strategy and for our approach we got more than enough opportunities that are out there. It’s more about negotiating the right terms and price,” he added.

Largest PE in Africa

To date the fund has invested approximately $300 million across a variety of industries and countries, including J&J Africa, a logistics business in Mozambique; Diamond Bank, a Nigerian Tier II Bank; Tiger Automotive (TiAuto), a leading tyre retailer and wholesaler in South Africa; and Traxys Group, a physical metals and minerals commodity merchant, logistics and trading firm with Africa presence.

Chigwende said that the Sub-Saharan Africa Fund, which was established in March 2012 to make buyout and growth capital investments in private and public companies from offices in Johannesburg and Lagos, hasn’t closed any deals this year.

The private equity firm – one of the largest operating in Africa – usually targets firm in consumer goods, financial services, agribusiness, and energy.

“Most of our opportunities continue to be consumer focused. The average ticket size for the Fund is around $70 million,” Chigwende told Africa Global Funds.

Sub-Saharan Africa has over the last decade attracted the attention of an increasing number of investors looking for new and promising opportunities.

Investing in the region has into various challenges, such as increased militant attacks, heightened political instability in some countries and a weakening currencies as oil prices drop globally.

Source: AFK Insider