Private Equity

Our geographical footprint and independence place us in an excellent position to assist private equity funds navigate the complexities of investing on the continent.

We provide bespoke upstream and downstream services to the private equity sector in Africa. Members of our team have advised on some of the largest private equity transactions undertaken in the region to date and have been involved in the formation of a number of Africa-focused private equity funds.

Fund formation

We specialise in structuring and forming private equity funds whose geographic mandate is focused within Africa. We have extensive experience in representing both private equity houses and limited partners. We devise bespoke structures that meet the needs of investors, and take into account the nature of the instruments and the industries in which the funds will invest.

We assist in selecting the appropriate jurisdiction for the domicile of the fund from a tax and legal perspective, in structuring carried interest plans and in drafting and negotiating fund agreements. We also provide exchange control advice and assist in obtaining the requisite approvals (for South African investors and funds).

We help clients obtain the regulatory licences and approvals required to act as fund managers.

Acquisitions and exits

We have a long history of advising private equity funds on all aspects of their mergers and acquisitions activity. We are commercial in our approach and innovative in finding solutions that balance the needs of different interest groups.

On acquisition we assist with due diligence, structuring, drafting and negotiating acquisition documents and obtaining regulatory (including competition) approvals. We also assist with management incentive arrangements and negotiating financing agreements.

Our deep experience helps us create solutions to shareholder issues and to craft shareholders agreements that protect the interests of different stakeholders in portfolio companies while optimising exit opportunities.

We have been involved on the exit side in numerous auction processes, proprietary sales and IPOs and look to assist our clients achieve a clean exit that minimises post-transaction liability and maximises value for all.

Our clients range from private equity and venture capital houses to investors, management, banks and financial institutions, throughout Africa and worldwide.

• We advised on the complete restructure of The House of Busby’s capital structure and third party debt, thereby avoiding its liquidation and securing our clients’ investments. Busby holds the licences for, among others, Aldo, Forever New and Guess, and is therefore an important competitor in the South African retail fashion market.
• Counsel to Rockwood, being the largest shareholder and funder in Tsebo Holdings Proprietary Limited, in the disposal of Tsebo to Wendel. Founded in 1971, Tsebo was acquired by the Rockwood-led consortium in a secondary buy-out in 2007. At the time, Tsebo was the leading empowered contract outsourcing business in Southern Africa. Tsebo is now the largest diversified contract facilities solutions provider in Africa with a presence in 22 countries, employing 34,000 people and generating revenue of approximately ZAR6.5 billion.
• Counsel to Kleoss Capital (specifically the Kleoss Fund I), a 100% black-owned South African private equity investment manager with a level 1 B-BBEE accreditation, in relation to its acquisition of a significant minority stake in Real Foods Proprietary Limited (owners of the KAUAI, NÜ Health Café and Kohu brands). Real Foods follows the global trend towards health and wellness, and aims to be a leader in shaping the South African natural food industry.Kleoss is said to be the type of equity partner who proactively engages with its investments and businesses at a board and strategy level, adding real value to the businesses in its portfolio. Real Foods describes Kleoss Capital as a “like-minded” partner with shared values of transparency, authenticity and entrepreneurial spirit.
• Counsel to ARM Cement Limited, a leading producer of cement, lime and fertilizer in East Africa, with operations in Kenya, Tanzania and Rwanda, in respect of a uSD140 million equity investment by CDC Group plc. The transaction aims to boost the local supply of cement in East Africa and promote infrastructure development. ARM Cement produces approximately 2.7 million tonnes of cement per year and employs approximately 3000 people.CDC Group has indicated that its long-term investment in ARM Cement is designed to help strengthen ARM Cement’s financial structure and to help the company develop to meet the growing demand for sustainably produced cement across sub-Sharan Africa. The transaction is expected to boost ARM Cement’s production capacity and create new jobs.
• Counsel to Africinvest in relation to its acquisition of an equity stake in SIL Africa.Bowmans advised AfricInvest on the transaction, conducted the due diligence on the Kenyan subsidiaries of the Sil Africa Group and coordinated due diligences through its office in Tanzania, its office in Uganda, and through engaging local counsel in other jurisdictions affected, including Benoit Chambers in Mauritius and Mehrteab Leul & Associates in Ethiopia.The Bowmans team also handled various competition authority approvals in Africa required for the transaction (in relation to COMESA, Kenya and Tanzania).
• Counsel to the African Agriculture Fund, a private equity fund managed by Phatisa Fund Managers Limited (Phatisa) which entered into a subscription agreement with Torre Industries Limited in terms of which AAF subscribed for 40% of the ordinary shares in Torre Equipment Africa Limited (TEA). This transaction constituted an approximate $15 million investment by Phatisa in TEA’s business. TEA is a pan-Africa equiptment distributor with operations in Cote d`Ivoire, Ghana, Liberia, Sierra Leone, Cameroon and Botswana.
• Counsel to technology, media and telecommunications focused private equity house Convergence Partners (Convergence) in its R10 million subscription for shares in the share capital of Snapt Systems Proprietary Limited (Snapt). Snapt is a South African technology company focusing on the provision of high-end virtualized and cloud-based load balancing, web acceleration and security software. It has been disrupting the market since its launch in 2012 and has achieved astonishing year-on-year growth of 400% in both 2014 and 2015. Snapt has also recently opened its first US offices in Atlanta. As part of its expansion in the US, Snapt aims to capture a 1 percent share of the USD 6.5 billion application delivery software market within the next three years. This interesting transaction sees Convergence Partners straddling the gap between straight venture capital and straight private equity. In effect, Convergence Partners has invested in Snapt as a “Series A” investor and it is envisaged that there will be later stage investors investing in the future at higher valuations.
• Counsel to East Africa focused private equity fund Catalyst Principal Partners in its investment in Orbit Chemical Industries Limited. Orbit Chemical Industries Limited was incorporated in 1972 as a trading organization. It has trading divisions trading in industrial chemicals and fertilizers, and manufacturing divisions manufacturing soaps and detergents, sulphonation, plastic packaging and agrochemicals. Although the value of the transaction is confidential, Catalyst’s typical investment ranges between $5 million and $20 million, either through equity, debt or a mixture of both. The transaction is expected to enable Orbit Chemical to realise its expansion plans by increasing capacity of its existing lines, extending its product range into new synergistic categories and by regionalising its manufacturing capability. This is expected to achieve stronger growth of existing and new customers in Africa. Orbit Chemicals, originally a chemicals trader, is now a state-of-the-art outsourced manufacturer with vertical integration producing high quality finished products within a diversified portfolio.
• Bowmans advised Choppies Supermarkets in relation to the acquisition of the retail business of Jwayelani Retail sold as a going concern for a transaction value of ZAR 189 million.
• Counsel to OMP Africa Investment Company Proprietary Limited in respect of its $ 62.5 million (KES6.4 billion) investment in the Two Rivers Mall in Kenya. The investment comprised of an acquisition of shares and loan funding. Two Rivers Lifesyle Centre Limited is in the process of constructing, developing and leasing out space in the Two Rivers Mall in the Northern side of Nairobi. The Two Rivers Mall, once completed, is said to be the biggest mall in East and Central Africa with a capacity of approximately 62,000 square metres. OMP Africa Investment Company Proprietary Limited is a subsidiary of the Old Mutual Group, and serves as the group’s property holding company across Africa.
• Counsel to Abraaj, AfricInvest and Swedfund, and counsel to UAP Holdings Limited, in relation to the disposal by Abraaj, AfricInvest and Swedfund of shares in UAP Holdings Limited to Old Mutual; this was reported as the largest exit in East Africa in 2015.
• Counsel to one of Africa’s leading providers of vendor neutral data centre services Teraco Data Environments, and to all of its shareholders, including the International Finance Corporation, Treacle Private Equity and management, in relation to the sale of Teraco to Pemira, an international private equity firm, for significant confidential consideration. This transaction was Permira Fund’s first investment in Africa. Co-founded in 2008 by Tim Parsonson and Lex van Wyk, Teraco is a dominant player in Africa’s data centre evolution. After a significant period of growth spanning 8 years, the start-up has grown into a significant nationwide business. It has three mature data centres across all major metropolitan areas, and has a proven strategy in the industry. Teraco, now the leading provider of reliable and resilient infrastructure across sub-Saharan Africa, will leverage off Permira funds’ experience in investing in technology markets globally.
• Counsel to Alexander Forbes Group Holdings advising on the dual track M&A and IPO process, which resulted in Alexander Forbes Group Holdings listing on the JSE. This was the largest IPO in 2014. Alexander Forbes initially listed on the JSE in 1996 and returned to the Main Board after delisting in 2007 when the company was bought by a private equity consortium.