Equity Bank, a listed Kenyan bank, has bought Uganda Microfinance Ltd. from shareholders like Aureos Capital's East Africa Fund and Norfund. The total deal is valued at approximately $25.5 million in Equity Bank stock.
Aureos Capital's East Africa Fund has successfully sold its stake in Uganda Microfinance Limited (UML) to Equity Bank, a leading Kenyan bank listed on the Nairobi Stock Exchange. Aureos Capital is a leading private equity fund management company specialising in investing in small to mid-cap businesses in emerging markets.
The sale was completed jointly with all other shareholders in UML, including Norfund, the Norwegian Investment Fund for Developing Countries. The existing shareholders of UML received consideration by way of 8,067,797 new ordinary shares of Equity Bank at a price of KShs206.50 per new ordinary share, bringing the total value of the deal to KShs 1.67 billion (US$25.5 million). Since the deal was completed Equity Bank's share price has increased dramatically and is now trading in a range of between 30% to 55% above the price at which the shares have been issued to Aureos.
UML is a leading Ugandan microfinance institution based in
Aureos originally invested in Uganda Microfinance Union (UMU), UML's predecessor, in 2004. This was a strategic investment that aimed to transform UMU, a locally owned microfinance NGO, into a Microfinance Deposit-Taking Institution (MDI) licensed by the Bank of Uganda. UML achieved MDI status in 2005. The granting of MDI status gave UML the firm grounding it needed to not only become more efficient in providing credit-mobilising savings but also to attract the interest of regional investors.
Aureos' investment in UML represented Aureos' first management buy-out of a business in
UML and Equity Bank will now be able to leverage their combined regional footprint to roll out an extended range of services to both retail and corporate customers with an aim to become leaders in financial service provision in the region.
Dr James Mwangi, Group Chief Executive Officer of Equity Bank comments: “The acquisition is the first major investment by the Bank outside
Davinder Sikand, Managing Partner, Aureos Kenya Managers Ltd says: “We are pleased to have brought together two outstanding institutions. Through this transaction UML gains access to a significantly higher level of capital and technology infrastructure, while Equity Bank gets access to a broader base of customers that is largely untapped.”
Adds Davinder Sikand: “This is a case where all parties stand to benefit and it highlights the vital role played by Aureos in facilitating sustainable growth and development of businesses it invests in, and their transformation into leading regional players.”
Charles Nalyaali, UML Chief Executive says: “We are proud to be part of a larger group dedicated to providing financial services to those with limited access to it. Aureos' help played a critical role in the development of UML into an MDI success story and our partnership has proven to be very fruitful.”
Peter Njoka, Partner, Aureos Kenya Managers Ltd comments: “The UML transaction highlights a key criteria of our strategy. Our value proposition extends beyond providing capital to the companies we invest in. We also provide their management with access to tools needed for the efficient growth of their business.”
AUREOS CAPITAL LTD
Aureos Capital Ltd is a unique private equity fund management company, domiciled in
It was formed in July 2001 to assume management of a range of funds originally sponsored by CDC Group plc and to raise and manage a new generation of private equity funds under the Aureos brand.
Today, the Shareholders in Aureos comprise employees, along with CDC Group plc, Norfund and FMO which are, respectively, the British, Norwegian and Dutch development finance institutions.
Since 2001, Aureos has increased its funds under management to over US$710 million and extended its geographical footprint to over 50 emerging markets covering Asia, Africa and
Investors in Aureos funds include institutional investors, bilateral and multilateral development finance institutions, fund of funds, family offices and foundations and high net worth individuals.
Aureos is in the process of raising funds for the US$100 million Aureos Central Asia Fund, the US$300 million Aureos Latin America Fund and the US$400 million Aureos Africa Fund.