Kenya upholds position as magnet for financial deals

Kenya attracted more than half of East Africa’s financial deals in the first eight months of this year, cementing its position as the region’s investment hub.

According to the latest research by corporate finance advisory firm I&M Burbidge Capital (IMBC), Kenya took up 57 out of the 87 deal that the region attracted over the period.

Kenya’s closest rival Tanzania, the report said, clinched a measly 11 business agreements.

Uganda, Rwanda and Ethiopia, on the other hand, posted eight, six and five deals respectively.  According to IMBC, Kenya’s position was boosted by recent big-ticket transactions, including Actis LLC’s joint venture (JV) with South Africa’s Improvon Group.

“The two companies have created a JV called ImpAct to build a 40-hectare industrial business park development at an estimated cost of $111 million (Sh11.5 billion),” said the firm’s analysts Edward Burbidge and Linda Obwora.

"The new development will be called Nairobi Gate Industrial Park and will be Kenya’s biggest industrial real estate investment to date.” 

According to IMBC, in the month of August alone, East African countries witnessed a total of 12 disclosed deals valued at more than $173.5 million (Sh18 billion).

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"This brings the total deal value and volume for the year to date to more than $1.3 billion (Sh130 billion) and 75 respectively,” said the firm.

IMBC found that the highest volume of deals to date in the region was recorded in the financial services sector, which boasts 18 out of the 75 disclosed deals.

"Other sectors that have seen significant deal activity are the energy, oil and gas sector, healthcare sector and the agribusiness sector,” said the company in its report. The real estate sector despite attracting the least number of deals had one of the highest value sizes in the ranking at more than $159.4 million (Sh15 billion).

The research also showed that the region and Kenya in particular, attracted the highest number of deals in private equity at 36 while mergers and acquisitions followed with 19 deals. 

Meanwhile, joint ventures and private equity (PE) exits in East Africa performed poorly, with each recording six deals. Bonds and commercial paper ranked bottom with one deal each.

However, the region’s mergers and acquisitions led the deal size at $562.6 million (Sh56.2 billion) followed by PE at $292.5 million (Sh29.2 billion ) while PE exits follow at $224 million (Sh22.4 billion).

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IMBCImprovon GroupNairobi Gate Industrial Park