top of page
catalyst black.jpg

2022 Annual - (released February 2023)

SA's quarterly Private Equity & Venture Capital magazine

Catalyst Cover.jpg


by Michael Avery

This is the 18th year in which the Private Equity Deal of the Year has been awarded. Nominations were received from advisory firms and judged by the Independent Panel, consisting of Nicky Newton-King, Phuthi Mahanyele-Dabengwa and James Formby.

Renewable deal signals secondaries coming of age

In a deal that signals that the secondary market for private renewable power assets is starting to come of age, Actis, a global investor in sustainable infrastructure, and Mainstream, the global wind and solar company, announced the sale of the Lekela platform to Infinity Group and Africa Finance Corporation (AFC) in the third quarter of 2022.


Lekela, established in 2015, is the African continent’s largest pure-play renewable energy Independent Power Producer (IPP). The platform includes over 1GW of fully operational wind assets, including five operational wind farms in South Africa (624MW), one operational wind farm in Egypt (252MW), and one operational wind farm in Senegal (159MW), as well as development opportunities in Ghana, Senegal and Egypt.


The platform was established as part of a joint venture between Actis (60%) and a Mainstream-led consortium called Mainstream Renewable Power Africa Holdings (MRPAH) (40%). The planned exit marks the successful culmination of their partnership strategy for Lekela, following a comprehensive value creation approach.

Through close engagement with neighbourhood communities, Actis and Mainstream have been committed to sustainable development throughout the entire development, construction, and operations journey. Lekela has implemented the highest international standards in health, safety and environmental protection with the help of Actis' and Mainstream's committed sustainability professionals. Lekela continues to run a community investment programme that funds initiatives for environmental protection, education and entrepreneurship.

"This exit highlights the hands-on approach we take at Actis as builders and operators of leading energy platforms of scale, delivering positive impact," said Lucy Heintz, Partner and Head of Energy Infrastructure at Actis. “Building on our Net Zero commitment, we're proud to leave Lekela well-positioned for its upcoming phase of growth as an acknowledged sustainability leader, supplying desperately needed clean energy to communities across Africa. We have concentrated on an active ownership approach with our committed sustainability team, enabling us to deliver a strong commitment to local African communities and environmental protection initiatives, investing behind the Energy Transition and delivering financial performance for our investors.”

Actis partner and head of sustainability, Shami Nissan continued, "Lekela's ranking as one of the top performing companies globally by Sustainalytics, under its ESG Risk Rating assessment process in November 2021, is a testament to the work we have done in collaboration with the management team of the company. Sustainalytics highlighted Lekela's effective management of business ethics, occupational health and safety, land use and biodiversity issues, and community relations."

The success of Actis and Mainstream's efforts in creating a premier platform for sustainable infrastructure that has produced a favourable impact and financial performance for investors is reflected in the sale of Lekela to Infinity Group and AFC. Additionally, it emphasises the value of Africa's renewable energy market, and the contribution of private equity to the region's move toward clean energy and decreased reliance on fossil fuels. Lekela is well-positioned for continued growth under its new ownership, due to its solid track record in sustainable development, and dedication to local communities.

Advisers to the deal were:
Citigroup Global Markets, Absa CIB, Cantor Fitzgerald, Webber Wentzel, Clifford Chance and Norton Rose Fulbright.


Comment from the Independent Panel:
This $1,5bn deal in the important renewables sector stood out because of its pan-African footprint, size and complexity, and its strategic significance in creating one of the largest renewable players across Africa and the Middle East, with an exciting growth pipeline.


Turning trash into treasure

EnviroServ, the largest private waste management business operating in sub-Saharan Africa, was acquired in June 2022 by a consortium of companies including SUEZ, Royal Bafokeng Holdings and African Infrastructure Investment Managers. The acquisition was made from Rockwood Private Equity, which had taken the company private in 2008 in a R1,9bn deal through Parchment Trading 72, an entity affiliated with ABSA Capital Private Equity.

EnviroServ is a leading provider of hazardous and general waste management services, with a turnover in excess of €80m. The company owns and operates a fleet of 175 specialised waste-transport vehicles and 10 treatment and disposal sites. EnviroServ also recently expanded its operations to the United States, acquiring the business and assets of Chemical Transportation Inc., a specialised waste transportation and environmental services company with operations in Arizona, New Mexico and Texas.

The acquisition of EnviroServ was made through a special purpose holding company, with SUEZ holding a 51% stake, 24.5% held by Royal Bafokeng Holdings and 24.5% by African Infrastructure Investment Managers. The acquisition speaks to the growth and potential of EnviroServ, and its valuable services in the waste management industry.

EnviroServ's acquisition by Rockwood Private Equity took place in 2008 through a newly established private company, Parchment Trading 72. The ultimate beneficial owners of the underlying assets and business of EnviroServ were certain private equity investment funds under the management of ABSA Capital Private Equity; Alistair McLean, who was the Executive Chairman of EnviroServ, also held 20.75% of the EnviroServ shares. This acquisition was supported by The Bidvest Group, which owned 30.23%, and Zeder Investments SPV2 with a 7.92% stake.

In 2013, a syndicate led by HarbourVest Partners LP and Coller Capital purchased the 73.37% limited partnership interest that Barclays Africa had held in Absa Capital Private Equity Fund I. At the time, Kwikspace – the biggest and most varied producer of prefabricated buildings in sub-Saharan Africa – Safripol, a producer of plastic, and Tsebo, a multifaceted catering and facilities management company, were among the assets owned by Absa Capital Private Equity Fund. Absa Capital Private Equity, the investment advisor to the General Partner of Absa Capital Private Equity Fund I, was spun off as a result of the sale to become Rockwood Private Equity, a new independent private equity fund manager.

Rockwood has a stellar exit track record. The Tsebo Group was sold to KAP Industrial Holdings in 2016 for an attributable enterprise value of R5.25bn, and Safripol was sold to the holding company for an equity value of R4,1bn. With total gross exit proceeds of about R9,4bn, these exits were among the biggest private equity funds ever completed in South Africa. The overall internal rate of return exceeded 23%, exceeding the 9.6% IRR for the JSE All Shares for the period of 2007 to 2016.

Advisers to the deal were:

Standard Bank, Rand Merchant Bank, Quercus Corporate Finance, Bowmans, Baker McKenzie and Roodt.

Comment from the Independent Panel:

This was noted as a complex asset to exit, with many issues specific to the waste management industry. The successful sale to a global leader was a great outcome for PE shareholders.

Studio 88 - "There is no finish line."

The Studio 88 group of companies, which includes brands such as Studio 88, Skipper Bar, Side Step and John Craig, was recently sold to Mr Price by RMB Ventures. The sale marks the end of RMB Ventures' 10-year journey alongside the Studio 88 management team, who have built a strong business in the branded athleisure space.


RMB Ventures first invested in Studio 88 alongside the founders in 2013, taking a 37% stake in the business. The management team at Studio 88 had a growth thesis to take the business from a 100-door operation with a turnover of R1bn to a 777-door operation with a turnover of around R6bn over the next 10 years.

According to Cassim Motala, Co-Head of RMB Ventures, investing alongside founders is vastly different from a typical management buyout or investment in a professional management team. Motala says that critical elements of such deals include establishing trust and alignment with founders, creating the right capital structure, and allowing the business to grow in both size and sophistication.


The growth of Studio 88 over the past decade has been largely organic, with a few acquisitions, such as Skipper Bar and John Craig, boosting the group's performance. While some smaller acquisitions didn't perform as well, Motala notes that this is to be expected in an entrepreneurial environment.

Throughout the decade-long investment, RMB Ventures worked closely with the Studio 88 management team to help them shift their thinking and grow the business. Motala states that creating freedom and closeness through informal interactions, rather than a formal board setting, was key to the success of the partnership.

As a balance sheet investor, RMB Ventures always had time for the exit, and the sale to Mr Price was always going to happen when it most suited the founders. The engagement and courtship with the Mr Price management team and founder started informally, to build trust and comfort with the investment. The deal structure was critical in creating alignment with the new owners, and the Studio 88 team allowed RMB Ventures to largely negotiate the deal with Mr Price, even for the follow-on transaction, demonstrating the level of trust between the teams.

Motala expressed deep satisfaction with the way the process unfolded, which returned an annual compound return of 20% per annum, and wished the management team and Mr Price continued success in the future. As the Studio 88 team like to say, "There is no finish line!"

Advisers to the deal were:

Rand Merchant Bank, Investec Bank, Bowmans, Deloitte and Renmere Advisory.

Comment from the Independent Panel:

A well-structured exit of a very successful growth asset in the retail sector.

Criteria used for the selection of the shortlist for Private Equity Deal of the Year:

  • An asset with good private equity characteristics: a cashflow generative business and able to service an appropriate level of debt; a business model that is resilient to competitor action and downturns in the economic cycle; a strong management team that is well aligned with shareholders and capable of managing a private equity balance sheet; predictable capex requirements that can be appropriately funded.

  • Deal size is a factor to filter deals, but plays a limited role for acquisitions. It does carry more weight for disposal.

  • Potential/actual value creation – was the asset acquired at an attractive multiple? If the deal is a disposal, was it sold at an attractive price? What is the estimated times money back and/or internal rate of return?


There is limited information available in the public domain on private equity deals, and even somewhat educated guess work doesn’t provide all answers in all instances.

bottom of page