The value of disclosed corporate deals in East Africa rose by 82 percent to hit Sh113.6 billion ($1.1 billion) in the first six months of the year, driven by activity in the financial, energy and manufacturing sectors.
Analysis by I&M Burbidge Capital Ltd shows that the number of deals increased by 15 to 49, mainly in the private equity, mergers and acquisitions space.
Private equity (PE) activity remains high as many funds that invested in the region in the early part of the decade now exit from positions, largely by offloading stakes to fellow PE funds.
“The total deal value and volume for the year-to-date (rose) to about $1.1 billion (Sh113.6 billion) and 49 deals respectively compared to $603 million (Sh62.3 billion) and 34 deals during the first half of 2018,” said I&M Burbidge in the June financial review report.
“The highest volume of deals in the year-to-date has been recorded in the financial services sector — 11 out of the 49 disclosed deals.
“Other sectors that have seen significant deal activity are energy, oil and gas, ICT, healthcare and FMCG (Fast-moving consumer goods).”
Private equity deals made up the bulk of the activity in the six months at 33, followed by mergers and acquisitions at 15.
In terms of disclosed value, mergers and acquisitions lead in the market at $552.6 million (Sh57 billion), partly due to the regulatory approvals that mean information about the ticket size is made public by the regulators.
The PE deals, on the other hand, are often closed without the value of a financial investment being disclosed.
In the first half of 2019, the value that was disclosed stood at $484 million (Sh50 billion), this being for both entries and exits.