AI Issue 11 2017

16 Acquisition International - November 2017 Verdant Capital operates on a Pan-African basis from its offices in Johannesburg, Ebene, Accra and Kinshasa, and is currently working on transactions in 16 different African countries. We spoke to Edmund Higenbottam as we look to find out more about the firm, and what aspects contributed to it being featured as Best Specialist Corporate Finance Firm 2017 - South Africa & Best Financial Service Deal: Sale of afb Ghana to Letshego Holding Limited. round one-quarter of the work taken on by Verdant Capital is in South Africa, which is the largest market for investment banking in Africa; and about half its work is in the smaller markets in Southern Africa. In each area, the firm is the largest investment banking adviser, for example, Botswana, Malawi, Mozambique, Namibia and Zambia. Edmund goes into more detail about the types of client the company deals with, and lists some examples of recent transactions. Increasingly, the balance of our work is in the rest of the Continent, including DR Congo, Ghana, Kenya and Nigeria. Recent examples of completed transactions since the award include, the sale of the Saint Gobain Pipelines business in South Africa for Saint Gobain, listed in Paris with a market cap of USD 30 billion; and again, in South Africa, a ZAR 50 million debt capital raise for leading fintech lender, Retail Capital. Outlining the firm’s overall mission, Edmund refers to the importance of satisfying clients. He talks about the steps that Verdant Capital will take in order to reach its targets, building upon each success individually, and undertaking each client individually. “Primarily, we provide our clients with the highest quality of work and often completed transactions lead to new business directly with parties we approach in our transactions. For example, we sold afb Ghana to Letshego, the leading pan- African consumer lender with a balance sheet of approximately USD 900 million. We are currently arranging a USD 100 million debt financing for Letshego. We bring specific knowledge and detailed analysis to our projects, and this shows on both sides of the table.” Separating itself from its competitors is Verdant Capital’s global connectivity, according to Edmund. Working with well-renowned, high-profile clients contributes greatly to the firm being able to mark itself out as the best possible option for clients. “A critical factor is our global connectivity; the bulk of our transactions involve leading global companies or investors on one side of the transaction or the Company: Verdant Capital Contact: ed.higenbottam@ verdant-cap.com Contact Email: Edmund Higenbottam Address: Northview Building, 57 Sixth Road, Hyde Park, Johannesburg, 2196, South Africa Phone: 0027101403700 Website: www.verdant-cap.com Investing in Excellence A WR170012 other. We have invested heavily in our network of relationships around the World. Our senior team brings experience earned in Europe and North America to Africa.” Providing us with a brief overview of the M&A markets at present, Edmund tells us what specific challenges and outside influences are affecting the market, and how Verdant Capital will adapt around this. “In terms of the overall investment environment, Africa continues to enjoy GDP growth at 1% or more above the levels prevailing in the G7. This fact, and high population growth has given credence to an Africa rising narrative. The reality is somewhat more nuanced, and these positives are offset by factors such as excessive resource / commodity dependence, significant fiscal and trade imbalances, weak institutions and inconsistent public policy. “Add to this, there has been an evolution of foreign direct investment into Africa by source. China has grown its share at the expense of the West, as part of its commodity aggregation story, but also as it seeks to develop a “soft power” strategy. However, how sustainable are these flows as China imposes ever tighter foreign exchange restrictions in response to its own debt issues? From Western Europe, there has been a re-energising of the development finance investor base, as a response to geo-political factors such as mass inward migration and to policy changes including a de- emphasising of aid to the public sector.” “In short, the investment environment is volatile. Verdant Capital operates in the upper-middle market (transaction sizes of USD 25 – 200 million) and the lower-middle market (transaction sizes of USD 5 – 25 million). In the lower-middle market, typically buyers are regional companies, or international companies which already have a strong base in Africa, or regional or specialist private equity. In the upper-middle market transactions appeal to corporate buyers globally and the largest private equity firms, which are active in the Continent.” Looking to the future, Edmund is clearly excited about the times ahead for Verdant Capital. If