Marlow Capital, a nascent private equity firm founded by two former HSBC bankers in Sub-Saharan Africa, has inked its debut deal: the acquisition of waste management company Wasteman Group. Financial details of the acquisition were not made public, although a source close to the situation pegged the deal at around $50 million.
Wasteman Group, which is headquartered in Johannesburg, has operations throughout the inland, Western and Eastern Regions of South Africa. It offers waste treatment, specialised industrial cleaning and logistical services.
Marlow Capital was established around 18 months ago by two ex-investment bankers with a view to executing buyouts in the Sub-Saharan African mid-market. The two founders, Andrew Hunt and Sean Meyersfeld, were previously at HSBC where Hunt was the investment banking head for the region and Meyersfeld was director.
Like other buyout firms operating in the Sub-Saharan African market, Marlow is looking to acquire companies benefiting from one of two key African themes: the growth in businesses benefiting from increased infrastructure spending across the region, such as Wasteman, and the expanding number of middle class consumers.
“We're not looking to participate directly in the commodities cycle, so we haven't been hit with the large downturn in that sector,” co-founder Andrew Hunt told PEI in an interview. “We still like Sub-Saharan Africa's long-term fundamentals.”
Marlow Capital is currently funding acquisitions on a deal-by-deal basis, attracting commitments mainly from European family offices. Hunt says the firm will build up its track record and look to raise its first-time fund when some normality returns to the fundraising market.
Infrastructure is proving to be a popular destination within Southern Africa for private equity capital. Last month PEI reported on Kingdom Zephyr, a pan-African GP, which made a $20 million investment in Buildworks, a South African company which builds electrical sub-stations for the power industry. In December, Emerging Capital Partners invested $30 million in West African utility company Finagestion, which owns significant water and power interests in C^te d'Ivoire and Senegal, while earlier in 2008 a consortium led by global emerging markets firm Actis paid $700 million for energy engineering company Alstom South Africa.