TLG completes new QCIL funding round

July 3, 2011, 2:30 am

TLG Capital has finalised its latest round of financing in Ugandan pharmaceuticals manufacturer Quality Chemicals Industries (QCIL), raising its stake in the company to 12.5%.

The investor has injected the new funding following QCIL’s achievement of milestones set up by the TLG when it first backed the company. The latest tranche is expected to boost QCIL’s production, with the company looking to triple its production from the current two million tablets a day to 18 million in 2013.

QCIL is looking to invest almost $80 million in its expansion program over the next two years. About $30 million will be injected in capacity expansion, while $50 million will fund a new pharmaceutical ingredients production line. The growth will primarily be funded organically.

TLG initially invested in the QCIL in 2009 and held an option to invest more tranches based on the performance. The company is also part-owned by South African private equity house Capitalworks Investment Partners and Indian pharmaceutical company Cipla. QCIL last year received endorsement from the World Health Organization for the manufacture of its antiretroviral and anti-malarial drugs.

“We are impressed by the management team’s ability to execute on the growth and expansion strategy much earlier than expected and are confident that QCIL will continue to build upon this success, including their plans for increased production capacity,” said Afsane Jetha TLG’s chief operations officer.

Founded in 1998, QCIL established its first plant in 2007 and manufactures triple-combination HIV antiretroviral drugs and anti-malarial drugs under license from Cipla India. The company is headquartered in Kampala and employs about 300 people.

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Capitalworks backs Rosond

March 17, 2012, 9:56 am

≫ Next: Morgan Stanley & Capitalworks back Rhodes Food

≪ Previous: TLG completes new QCIL funding round

Capitalworks has reportedly invested an undisclosed amount in Rosond, a mining exploration company based in South Africa.

The investor was attracted to Rosond because of its robust management team, and the company’s strong historic growth. The deal also sees management, led by managing director Armando Cravo, acquire a stake in the company. The investment is expected to support new product development and staff training.

Rosond has been servicing southern Africa’s mining and civil engineering industries since 1956. The company is active in underground mining development and exploration drilling, cementation works and pre-cementation of shafts as well as grout pack support systems.

Headquartered in Johannesburg, Rosond has long-term contracts with leading mining companies such as Goldfields, Anglo Platinum, Implats and Lonmin, BHP Billiton, Kumba Resources, and South Deep Gold Mine.

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Morgan Stanley & Capitalworks back Rhodes Food

October 8, 2012, 5:18 am

≫ Next: Capitalworks and RMB in $144m Construction deal

≪ Previous: Capitalworks backs Rosond

Morgan Stanley Alternative Investment Partners and Capitalworks have backed the management buyout of Rhodes Food Group (RFG), a South Africa-based food producer. The financial details have not been disclosed.

The duo has bought 100% of the company, alongside its senior management. The investors bought a majority stake from South Africa-based food producer, Ivor Ferreira Trust, which has owned the company since 1999.

The transaction was initiated by Ivor’s decision to exit the business, in bid to re-balance its investment portfolio. The deal was additionally propelled by the management’s desire to own equity in the business. Step Advisory acted as corporate finance advisor on the deal.

The financing is expected to help the company defend its position in South Africa’s food industry. The company is understood to be one of the country’s leading producer of branded ready-to-eat foods.

“The transaction provides a welcome addition to our portfolio of attractive investments in sectors such as building materials, affordable housing, recycling, healthcare, and mining resources,” said Chad Smart, Capitalworks’ chief executive officer.

Based in Groot Drakenstein, RFG produces prepared meals, dairy products, pies and canned foods. The company was initially created as Rhodes Fruit Farms in 1897, to sell of fresh deciduous fruits but also canned products and jams.

The company was merged with Wonderland Foods and Swazica after it was acquired by Ivor Ferreira in 1999 to create Rhodes Food Group. As of 2012, the company had revenues of about $247million (R2 billion).

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Capitalworks and RMB in $144m Construction deal

July 9, 2013, 2:02 pm

≫ Next: Capitalworks II closes at $270m

≪ Previous: Morgan Stanley & Capitalworks back Rhodes Food

Capitalworks and RMB Ventures have sealed a deal to buy Construction Products Africa , a South Africa-based manufacturing operating platform, for approximately $144m (R1.33billion).

The duo is buying the platform from South Africa’s Murray & Roberts, an engineering and construction holding company. The deal sees the vendor exit the platform’s Much Asphalt, Rocla, Technicrete and Ocon Brick businesses.

Capitalworks bought Much Asphalt alongside the company’s management. RMB Ventures joined Capitalworks on the Ocon Brick, Technicrete and Rocla purchases – which were also structured as management buyouts.

The sale excludes Hall Longmore, a manufacturer of welded steel pipes which has also been operating under the Construction Products Africa platform. Murray & Roberts is still in discussions with undisclosed buyers on the sale of the unit.

The acquired companies manufacture asphalt, steel piping, concrete , cement and clay bricks to the construction industry.

Murray & Roberts is divesting from the manufacturing sector, and will use the capital to pay down its debt and invest in its core sectors.

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Capitalworks II closes at $270m

July 30, 2013, 5:23 pm

≫ Next: OMPE wins on FoF strategy

≪ Previous: Capitalworks and RMB in $144m Construction deal

Capitalworks has reached the final close of its sophomore vehicle at approximately $270million (R2.7 billion).

Capitalworks Private Equity Fund II has attracted two thirds of its commitments from institutional investors, high-net worth individuals, family offices and charities. Capitalworks II was officially launched in 2013.

The fund received about $149million from US-based investors, according to regulatory filings, while South Africa’s Old Mutual is understood to have committed just over $5million.

Capitalworks II is structured as a Cayman Islands vehicle, and received more interest than the fund manager was targeting.

“The fund was over-subscribed, [but] we had to cap it at the pre-determined level to stay true to our investment strategy,” Chad Smart, chairman at Capitalworks.

The mid-market vehicle will primarily target healthcare, education, financial services and consumer sectors. The fund’s manager is seeking companies with strong brands, leading market positions and robust growth prospects.

This latest vehicle raises Capitalworks’ assets under management to approximately R5 billion.

Asante Capital Group was placement agent on the fundraising, led by managing partner Warren Hibbert.

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OMPE wins on FoF strategy

August 3, 2013, 7:28 am

≫ Next: Capitalworks completes Much Asphalt acquisition

≪ Previous: Capitalworks II closes at $270m

Old Mutual Private Equity’s multi-manager funds-of-funds (FoFs) have generated strong returns, underscoring the investor’s recent decision to launch a third vehicle under the strategy.

The asset manager has launched Old Mutual Multi-Manager Private Equity Fund 3 (OMMMPEF3), following a similar strategy to OMMMPEF1, launched in 2006, and OMMMPEF2 which has a 2007 vintage year.

The latest vehicle is sized at R600 million and is targeting high net-worth, individuals, retirement funds, corporates, trusts and tax-exempt institutions.

A minimum of R100,000 is required to invest in the fund, with a R25 million cap per retail investor. OMMMPEF3 is targeting returns over inflation of consumer price index (CPI) + 10%, in line with its two predecessors.

The 10.5-year fund has a plain vanilla offering of 20% carry and 2% management fee. OMMMPEF3 also charges an exit fee – for investors getting out of the fund early.

“The reason we believe private equity firms are successful in building better quality businesses is because of an alignment of interest between investors, private equity managers and management,”said Jacci Myburgh, head of Old Mutual Private Equity.

This latest vehicle has a 23% exposure to Ethos Fund VI, which closed at $800 million in early 2013. OMMMPEF3 also has 18% in Actis Fund III, a broad emerging market vehicle that is expected to close at about $5billion by the end of this year.

The fund has also committed 9% of its latest fund to Capitalworks Fund II, which has recently closed at about $270million (R2.7billion). OMMMPEF3 has allocated the bulk, 41%, to its captive vehicles, while 9% is yet to be allocated.

Old Mutual launches the new vehicle on the back of strong performance from its two preceding multi-manager funds-of-funds. OMMMPEF1 brought in one-year returns of 10.7%, as of March 2013, while three-year returns stood at 21.1%. The vehicle has delivered a real return of 25.3% in annualised returns since its inception.

The vehicle mainly has exposure to mature assets in the underlying funds. OMMMPEF1 is 65% allocated to Ethos Fund IV, 33% to Brait Fund V, while 2% is in one of Old Mutual’s captive funds.

On the other hand, OMMMPEF2 has returned 16.6% for the year and 14.8% over three years. However, the fund’s annualised returns since inception stood at 3.9%.

OMMMPEF 2 has the highest exposure to Lereko Metier Capital Growth Fund I, which took 25%, and Actis Fund III which was allocated 24%. Others are Brait Fund IV with 4%, and Ethos with 8%. About 26% of the OMMMPEF 2 funds are allocated to Old Mutual’s captive vehicles.

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Capitalworks completes Much Asphalt acquisition

November 7, 2013, 6:35 am

≫ Next: Fundraisiers bring in $2bn

≪ Previous: OMPE wins on FoF strategy

Capitalworks has completed its deal to wholly acquire South Africa’s Much Asphalt, a construction products manufacturing company.

The investor backed the management buy-out alongside Mineworkers Investment Company. The consortium has bought the company from South Africa’s Murray & Roberts, an engineering and construction holding company.

Murray & Roberts sold Much Asphalt as part of a series of divestitures from a number of non-core businesses.

The company has also sold Rocla, Technicrete and Ocon Brick businesses, which in addition to Much Asphalt has brought it approximately $144m (R1.33billion).

RMB Ventures joined Capitalworks on the other three deals.

Chad Smart is chairman at Capitalworks.

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Fundraisiers bring in $2bn

November 29, 2013, 7:11 am

≫ Next: Capitalworks & Morgan Stanley’s to list RFG

≪ Previous: Capitalworks completes Much Asphalt acquisition

Private equiteers have brought in $2bn in reported closings for the year up to September, according to Preqin data.

The figure beats the $1.8bn reported for the 2012 full-year , bringing a warm feeling to the continent’s private equity industry.

The first two quarters of the year had been comparatively chilly, as fundraisers were reported to be struggling to bring in capital. Although the new figures bring a cheer to some, the amount raised is still some way from the $2.9bn brought home in 2011 – the highest level since the credit crisis.

Even so, the historic record year on Preqin’s record remains 2007 – when $5bn was raised for Africa – a boom year in global private equity fundraising.

This year’s fundraising has been lifted by Ethos, which at the beginning of the year announced the closure of its its $800m fund. Vital Capital contributed $350m from its maiden vehicle, while Phatisa reached the final close of its first fund at $243m – coming in lower than its original target.

Despite the welcome closures, managers report that LPs are still slow to sign off on commitments. Hopes had been raised earlier in the year, when an LP sentiment survey from the Emerging Markets Private Equity Association (EMPEA) for the first time placed sub-Saharan Africa above the BRIC nations.

Managers are also beginning to feel the effect of change in strategy from the development finance community, which has traditionally been the industry’s fundraising saviour. Long-term industry anchors such as the CDC Group are now allocating more capital to direct investing and debt funds, meaning managers have to squabble for a shrinking private equity pool.

The CDC Group in Q2 committed $50m to the Cordiant Emerging Loan Fund IV, as part of its increased focus on the debt markets. The UK-based development finance institution (DFI) has also been focusing more on direct investing, as part of its new strategy.

Elsewhere, DFIs like Dutch institution FMO have been moving more towards direct investing through co-investments, while Germany’s DEG is increasingly looking at mezzanine structures.

As such, placement agents have become even more important to some managers, particularly in the more sophisticated markets such as the US. Indeed, Capitalworks, which has closed its second vehicle at approximately $270m, raised with the help of UK-based placement agent Asante Capital. Capitalworks also got local support from Old Mutual.

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Capitalworks & Morgan Stanley’s to list RFG

September 5, 2014, 11:24 am

≫ Next: Capitalworks & Morgan Stanley’s RFG raises $102m

≪ Previous: Fundraisiers bring in $2bn

Capitalworks and Morgan Stanley’s South Africa-based food production portfolio company Rhodes Food Group (RFG), is to be listed on the Johannesburg Stock Exchange (JSE). RFG …

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Capitalworks & Morgan Stanley’s RFG raises $102m

September 26, 2014, 1:00 pm

≫ Next: Capitalworks in $26m SG exit to Investec’s Ascendis

≪ Previous: Capitalworks & Morgan Stanley’s to list RFG

Capitalworks and Morgan Stanley’s South Africa-based food production portfolio company Rhodes Food Group (RFG) has raised approximately $102 million (R1.1billion) in a private placement. The …

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Capitalworks in $26m SG exit to Investec’s Ascendis

November 15, 2014, 11:05 am

≫ Next: TLG’s QCL gets $30m

≪ Previous: Capitalworks & Morgan Stanley’s RFG raises $102m

Capitalworks is partially exiting South Africa-based healthcare products distributor Scientific Group (SG), through the sell of its SG Diagnostics unit to Investec Asset Management portfolio …

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TLG’s QCL gets $30m

May 29, 2015, 11:29 am

≫ Next: Sanlam revives PE business with Motsepe

≪ Previous: Capitalworks in $26m SG exit to Investec’s Ascendis

Uganda-based Quality Chemicals Limited (QCL), a company part-owned by TLG Capital and Capitalworks has received $30million from India-based drugs manufacturer Cipla. Cipla has invested the …

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Sanlam revives PE business with Motsepe

July 26, 2015, 6:03 am

≫ Next: Capitalworks portfolio in $365m deal

≪ Previous: TLG’s QCL gets $30m

South Africa-based billionaire entrepreneur Patrice Motsepe has reportedly partnered with Sanlam Investment Management to set up a $500 million private equity fund. The partnership with …

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Capitalworks portfolio in $365m deal

September 11, 2015, 12:15 pm

≫ Next: Capitalworks in $25m MBO

≪ Previous: Sanlam revives PE business with Motsepe

Capitalworks has facilitated a $365million new round of capital raising for its Africa telecommunications services portfolio company. Smile Telecoms Holdings has raised $365 million in …

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Capitalworks in $25m MBO

September 29, 2015, 2:22 pm