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Kenya leads EA in mergers and acquisitions of private companies

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Rising business confidence, consumer demand and improving economic conditions in the region have whetted business executives’ appetite for firms in the technology, mining and financial services sectors.

Rising business confidence, consumer demand and improving economic conditions in the region have whetted business executives’ appetite for firms in the technology, mining and financial services sectors. 

By MWAURA KIMANI and EMMANUEL WERE The EastAfrican

Posted  Saturday, August 4   2012 at  19:28

Fanisi had bought a 30 per cent stake in Craft Silicon for $2.5 million in November 2009.

But one and a half years down the line, both parties were not reading from the same script, leading to an agreement whereby the software company, which focuses on banking software, would buy back the shares held by the venture capital firm.

Ordinarily, Fanisi invests for three to five years in companies.

The sale deal was concluded on July 20, 2012.

Said Kamal Budhabhatti, the founder of Craft Silicon, “What we wanted was much more than just money.

If we needed money, we would have gone to a bank. What was the point when they were not adding value?” he posed, while maintaining the exit was amicable.

In Uganda, whereas there has been keen interest in the energy sector, especially oil, deals are emerging in other sectors too. At least five deals have been closed so far.

Ireland Blythe of Mauritius last month acquired 50 per cent shares in Fresh Cuts Ltd, a major distributor of fresh meat to local supermarkets.

Satnav East Africa Ltd, a navigation services provider, sold a 26 per cent stake to South Africa’s MAP IT for an undisclosed sum in April and Marsh Ltd, a US-based provider of insurance brokerage risk management services, acquired Alexander Forbes Insurance Brokerage Services’ operations in Uganda.

The China National Offshore Oil Corporation (CNOOC) farm down deal with Tullow Oil Plc for a one third interest in Tullow’s Exploration Areas for $1.467 billion closed in February.

In the pipeline, Actis, the British based private equity firm, plans to dispose of at least 30 per cent of its shares in Umeme Ltd to the public through an equity offer on the Uganda and Nairobi bourses before the end of year.

Rwanda is seeing its fair share of deals, especially in the banking sector, while in Tanzania, oil and gas as well as hospitality remain the key target sectors.

But even though foreign money is finding a home in companies in the region, it is not all smooth sailing.

Venture capital and private equity (PE) firms do not always share the same vision with entrepreneurs.

Some of the divorce proceedings are amicable while others never hit the headlines because of confidential agreements.

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