EA corporate deals post marginal rise

There was a slight increase in east African corporate deals in the first five months of the year compared to a similar period last year, with private equity (PEs) dominating the landscape.

Research by advisory firm I&M Burbidge Capital shows there have been 34 deals, compared to 32 in the first five months of 2018.

There were 19 PE deals in the period compared to 11 in mergers and acquisitions, three joint ventures and one PE exit deal.

“There were eight disclosed corporate deals in the month of May up from the five disclosed in April 2019. The total disclosed deal value, however, declined to $80.2 million (Sh8.1 billion) compared to $193.6 million (Sh19.7 billion) in April due to the lack of disclosure of value in most of the PE deals in the region,” said I&M Burbidge Capital CEO Edward Burbidge in the report.

“This brings the total disclosed deal value and volume for the year to date to approximately $859.4 million (Sh87.6 billion) and 34 respectively.”

The 32 disclosed deals in 2018 were valued at $466 million (Sh47.5 billion), with mergers and acquisitions leading the space at 13 followed by PE at 12.

In terms of disclosed value, mergers and acquisitions lead in the market at $526.6 million (Sh53.7 billion), partly due to the regulatory approvals that mean information about the ticket size is made public by the regulators.

PE deals on the other hand can be easily closed without the value of financial investment being disclosed.

In the first five months of 2019, the value that was disclosed stood at $307 million (Sh31.3 billion).

Kenya in the meantime has continued to account for the bulk of the deals in the region, especially in private equity.

A report by consultancy KPMG and the East Africa Private Equity and Venture Capital Association tracking PE investments shows that Kenya accounted for 87 percent of the total $1.4 billion (Sh140 billion) investments made in the region in 2017 and 2018.