Mergers and acquisitions dominate E. Africa deals rising to Sh113.5bn

I&M Burbidge Capital CEO Edward Burbidge. file photo | nmg 

In Summary

• Private equity deals dominated the market in the first seven months of 2016, accounting for 24 out of 64 deals valued at Sh78.2 billion.
• In Kenya, the only firm to issue a corporate bond this year is EABL #ticker:EABL with the Sh6 billion second tranche of its medium term note which carries a full target of Sh11 billion.
• The market has also been quiet on rights issues, partly attributable to a depressed market limits the amount a firm can raise through this avenue.
• Regionally, the only concluded IPO since the beginning of the year is that of I&M Rwanda in March, in which the Rwandan government exited the lender in the sale valued at Sh1.1 billion.

By CHARLES MWANIKI
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Mergers and acquisitions dominated regional deals in the first seven months of the year as the disclosed value of such transactions went up by 45 per cent to Sh113.5 billion.

A regional report compiled by I&M #ticker:I&M Burbidge Capital shows that there have been 23 mergers and acquisitions in East Africa since January, accounting for 54 per cent of total deals which stand at 43.

Private equity deals dominated the market in the first seven months of 2016, accounting for 24 out of 64 deals valued at Sh78.2 billion. But this year the number has fallen to 12.

Kenya dominated the deals scene this year, cementing the country’s reputation as the regional economic hub.

“July recorded seven deals valued over $100 million, making it a fairly busy month. Interestingly, all the deals were done in Kenya and only one had an announced value (Abraaj’s acquisition of Java House restaurant chain); so the total value would have been significantly higher,” said I&M Burbidge Capital chief executive Edward Burbidge in the report.

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“Given the proximity to the elections we believe this is indicative of the positive and long-term outlook that most strategic and financial investors are taking.”

Kenya will on Tuesday hold a closely contested presidential election which has raised political temperatures and reduced business activity. On the capital raising front, there has been a dearth of IPOs and corporate bond issues in the region, with only one of each recorded.

In Kenya, the only firm to issue a corporate bond this year is EABL #ticker:EABL with the Sh6 billion second tranche of its medium term note which carries a full target of Sh11 billion.

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The market has also been quiet on rights issues, partly attributable to a depressed market limits the amount a firm can raise through this avenue.

Regionally, the only concluded IPO since the beginning of the year is that of I&M Rwanda in March, in which the Rwandan government exited the lender in the sale valued at Sh1.1 billion.

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