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North African PE deals total $5.3bn over seven years

An African Private Equity and Venture Capital Association report notes that 156 PE transactions took place in the region from 2007 to 2014.

The value of private equity transactions in North Africa from 2007 to 2014 totalled $5.3 billion across 156 reported deals, according to an African Private Equity and Venture Capital Association report.

In its study, “Spotlight on North Africa Private Equity” the association noted that the region accounted for 15 percent of African deal volume and value over the period.

Morocco, Egypt and Tunisia dominated the market accounting for 90 percent of all deals by volume and value. Morocco was the venue for the greatest number of deals at 39 percent. The median deal size was $10 million.

“Deal volumes in North Africa have remained stable in recent years because of local PE firms’ continued appetite to invest in businesses, and the ability of small and medium-sized enterprises to successfully identify new export markets,” AVCA research analyst Ponmile Osibo said in a statement announcing the report. “We see this level of deal activity as continuing.”

The report’s figures exclude investments led by the UAE’s Abraaj in Egyptian Fertiliser Company in 2007 for $1.7 billion and Egypt’s Orascom Construction Industries in 2008 for $1.6 billion. Including those investments, Egypt would account for 73 percent of North African PE deals by value, followed by Morocco with 15 percent and Tunisia with 7 percent.

There were 61 exits predominantly to African and multinational trade buyers, the report said. These included Abraaj’s exit in May 2015 of Egypt’s Integrated Diagnostics Holdings through an initial public offering and a sale to PE. It held that investment for seven years. AfricInvest sold Morocco’s Maghreb Accessories in early 2015 after three and a half years generating a 4.3x return on its invested capital. Emerging Capital Partners exited its six-year investment in Tunisia’s Sociéte d’Articles Hygiéniques in January 2014 through an IPO for a cash multiple of 2.4x.

PEI reported in early July in its MENA briefing that political stability and returning business confidence in key North African markets like Egypt was driving the revival of regional private equity.