Finnish financial group Taaleri is set to acquire a 20 per cent stake of private equity investment firm Cytonn. The move is meant to provide the investment firm with a strong anchor investor ahead of its Initial Public Offering (IPO) scheduled for next year.
Taaleri is a subsidiary of Taaleri Plc which is listed on Nasdaq Helsinki’s stock exchange.
Cytonn Investments chief executive Edwin Dande on Friday confirmed that they are exploring an IPO offer, and the 20 per cent stake price will be determined at the IPO.
“This transaction is important for two reasons; first it affirms market confidence in our brand and unique business model, and second it provides a strong anchor investor as we prepare for our IPO, which we hope to complete next year, either at a local or global exchange,” said Mr Dande.
He said they have already engaged with two sets of transaction advisors in Nairobi and London, to explore a local listing either on the Nairobi Securities Exchange (NSE) or a listing on the London Stock Exchange (LSE).
“Taaleri has then committed that during that IPO which we expect to be between the second and third quarters of 2019, it will buy the 20 per cent stake,” said Mr Dande.
He said the ultimate listing jurisdiction will depend on valuation, investor interest and ease of listing.
“We also hope to broaden our partnerships by bringing on board one additional local or global anchor institutional investor at the IPO,” said Mr Dande.
The transaction will enhance the two firms’ relationship beyond project financing to shareholding.
This will be the fifth time the Finnish firm will be investing in Cytonn, having already committed over Sh5 billion towards projects and investments with Cytonn. They are The Alma, the Ridge, Situ Village and Amara Ridge, which have already been delivered to homeowners.
Taaleri has already received back its investments from Amara Ridge and The Alma.
Taaleri manages investments worth Sh813 billion and provides funding in real estate sector in Africa through two Africa dedicated real estate funds.
Taaleri Group chief executive Juhani Elomaa said through Cytonn, Finnish pension funds and investors have not only earned attractive returns that are not available in the developed markets, but they have contributed to growing the country’s economy, jobs creation, and driving the deepening of capital markets through structured finance transactions.
“The share options agreement for a 20 per cent stake is an opportunity to deepen the relationship beyond project finance to shareholding,” said Mr Elomaa.
Cytonn Investments Management Plc currently has over Sh82 billion of investments and projects under its stable, mainly in real estate projects which target institutional, high net-worth and diaspora investors.