Verdant Capital was ranked No 4 by deal flow in 2022 in the DealMakers Africa M&A leagues tables, for the pan-Africa (ex-South Africa) region overall. DealMakers is the pre-eminent league table agency for Africa.
In the East Africa region league table (Corporate Finance deal flow), Verdant Capital finished first in 2022. This follows the firm’s joint-first place ranking in 2021.
Verdant Capital completed M&A and private capital transactions in each of East, West and Southern Africa. Verdant Capital’s landmark transactions in completed in 2022 included: the follow-on equity raise for WIOCC, the pan-African data centre and digital infrastructure player, taking the total capital raise to USD 124 million; the sale of leading Nigerian fintech, Baxibox to MFS Africa; and the Series A extension for leading remittance-to-wallet and mobile money business, Zeepay.
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In South Africa, Verdant Capital advised on the successful acquisition of a stake in leading battery maker Freedom Won. Overall, in recognition of the firm’s successes advising private equity firms on exits and facilitating new investments, Verdant Capital was awarded the title best local financial advisor in the presitiguous Private Equity Africa awards in 2022 for the second consecutive year.
In 2022 Verdant Capital also completed its first investment from the Verdant Capital Hybrid Fund, into Watu Credit Uganda.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
Verdant Capital, a South African investment manager, has announced the first $36 million closing of its new investment vehicle, the Verdant Capital Hybrid Fund, which focuses on micro and small businesses in Africa, including fintechs.
The German KfW Development Bank, the fund’s initial investor, has pledged $34 million. Private investors have also pledged money to the Verdant Capital Hybrid Fund.
“The fund will invest hybrid capital and subordinated debt instruments in inclusive financial institutions across the continent. It will target specialized banks, microfinance organizations, leasing and factoring companies, fintechs and other non-banking financial organizations,” the company said in a statement.
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Verdant Capital’s last operation was two months ago, hence the launch of this new fund is timely. As part of a $80 million fundraise, the South African fund management firm advised the Mauritian telecoms service provider West Indian Ocean Cable Company (WIOCC) in November. The funds generated will be used to support the company’s expansion plans and expedite its investments in digital infrastructure across Africa.
The Verdant Capital Hybrid Fund intends to secure the availability of equity and hybrid capital in African financial institutions, in order to help the continent’s capital markets expand. The amount of money that will be allocated by this new investment entity has yet to be determined. Verdant Capital Hybrid Fund’s capital will be supplemented by debt financing provided by additional investors, according to the fund manager.
In addition to this first round, Verdant Capital intends to hold two further rounds in order to attain a total of $100 million during the new Fund’s ultimate close.
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions. He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance. He is also an award-winning writer
Verdant Capital has been named by Private Equity Africa as the best Local Financial Adviser for 2021 According to Private Equity Africa, an authoritative journal for private equity investors in Africa and into Africa, Verdant Capital has lived up to the billing. The final winners were selected by an independent panel of 20 judges which included representation from CDC, DEG, EBRD, IFC, Mbuyu Capital Partners, Wimmer Family Office, 27four Investment Managers and Family Office Data Alliance.
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The award is a reflection of the strength of Verdant Capital’s private equity, private credit and fintech franchises and the transactions which it concluded over the period. Landmark private equity-related transactions completed by Verdant Capital in 2021 include the USD 80 million equity capital raise for pan-African telecoms business, WIOCC raised from African Capital Alliance, the sale of Nigerian fintech, Baxi to MFS Africa, a portfolio company of AfricInvest and Lun Partners, the sale of General Cargo for Kibo Partners, the USD 10 million capital raise for Retail Capital, portfolio company of APIS, Crossfin and FutureGrowth and the USD 8 million capital raise for Ghanaian fintech Zeepay, invested by I&P. Verdant Capital’s private equity franchise has enjoyed success across East, West and Southern Africa.
The award follows a similar award by Africa Global Funds, which awarded Verdant Capital the accolade, Best Independent Investment Bank – Pan-Africa – 2021, the second year running.
Verdant Capital is currently seeing strong growth in private equity mergers & acquisitions or M&A activity within its own pipeline as well as in the market overall. This is in part driven by exits from fund vintages from the earlier part of the last decade as well as by consolidation by and between private equity-backed companies. Verdant Capital expects 2022 to be a stronger year still for its private equity M&A business.
The final weeks of 2021 has proven a strong period for Verdant Capital with the firm announcing a further three fintech transactions. In the insurtech sector Verdant Capital advised each of South African-headquartered emerging markets insurtech Briisk, and Botswanan-headquartered pan-African risk-carrying insurtech, on their respective capital raises. In East Africa Verdant Capital advised technology-enabled MSME-asset financing business, Tugende on a USD 16 million capital raise. Tugende is a portfolio company of Partech and M54. These three successful transactions take Verdant Capital to a total of eight successful transactions in the fintech sector in Africa in 2021.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
Verdant Capital has closed four private equity-related transactions in South Africa with important fund raisings for Bridge Taxi Finance and Retail Capital, the sale of Nedan Oil and the sale of Baxi to MFS Africa. The ZAR 300 million (approx. USD 20 million) in debt financing for Bridge Taxi Finance from a small group of leading international impact investors is expected to be used to grow the institution’s lease portfolio. In addition, Verdant Capital has raised ZAR 150 million (approx. USD 10 million) in debt funding for Retail Capital, a leading technology-enabled SME-financer. The first tranche of ZAR 50 million was drawn in October and the balance of which will be drawn in 2022.
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Bridge Taxi Finance, based in South Africa, provides affordable credit facilities to South African driver-entrepreneurs in the minibus taxi industry. It has a vertically integrated business model that includes impact vehicle finance, day to day tracking, advice and management, and vehicle repairs and services. The company has financed over 3,200 entrepreneurs to date (1,100 in FY2021 alone). Bridge Taxi finances financially excluded individuals and provides them with an opportunity to own income-generating assets, enabling them to contribute positively to the economy. The transaction is the first introduction for Bridge Taxi into the international markets marking a landmark transaction for the inclusive finance sector in South Africa. Bridge Taxi is majority owned by the founders, with a minority held by domestic private equity.
Retail Capital is the first and largest Merchant Cash Advance provider in the South African SME market. The company was established ten years ago, and it has disbursed over ZAR 4.5 billion to more than 38 000 merchants since inception. It is on target to disburse ZAR 8 billion to small businesses by 2023. Retail Capital continues to make strategic partnerships by working with fintech companies to fast-track the financial inclusion of SMEs. In its growth, Retail Capital has been supported by shareholders from amongst the leading private equity firms investing in Africa, APIS, Crossfin and Future Growth.
The successful raise is the third transaction for which Verdant Capital has acted as sole international arranger and advisor for Retail Capital. This transaction and the capital raise for Bridge Taxi Finance reinforces Verdant Capital’s position as the leading advisor to Inclusive Financial Institutions in Africa.Also contributing to innovation and disruption to the financial services sector, in a landmark cross-border transaction, Verdant Capital advised leading super-agent in Nigeria to MFS Africa, a leading South Africa-headquartered pan-African payments business and a portfolio company of Lun Partners, Goodwell and Equator Capital.Finally, Verdant Capital advised Philafrica on the sale of its soya oil crushing interests. Philafrica, a subsidiary of AFGRI, has sold its soya oil crushing plant, which trades in the market under the names Nedan, Marathon, Soya Ya Ka, Promax (soya oil cake). AFGRI is owned by Helios Fairfax Partners, which is a leading pan-Africa-focused alternative investment manager, and the Public Investment Corporation of South Africa.
The sale of the soya oil business is motivated in part by the overall strategy of AFGRI to focus on its core business, which involves providing leading agricultural services to South African farmers, ensuring a food secure South Africa. The acquiror is majority BBBEE-owned party, and the transaction marks an important contribution to the transformation of foods sector in South Africa. Verdant Capital expects an increase in transactions in the agri-business and food sector over the next 24 months, driven by fundamental demand drivers as well the number of private equity investments from the last decade which are now reaching maturity. The successful mandate is Verdant Capital’s fourth successful transaction in the sector in the last 18 months and the firm is currently engaged on other transactions in the sector. The completed transactions, reinforce Verdant Capital’s position as a leading advisor to the private equity sector in Africa.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
