Centum Investment Company’s private equity wing has set aside KSh 5 Billion that targets acquisitions in various sectors of Kenya’s economy.
The listed firm is seeking already profitable firms that are looking for growth capital or where owners want to cash in on part of their equity investment.
Centum Capital Partners, a wholly-owned subsidiary of Centum has in the past acquired significant stakes in various sectors including financial services, fast-moving consumer goods, manufacturing, energy, education and technology.
“We are building a promising pipeline of deal are is in talks with a number of investee targets that we hope to conclude in the coming months,” said Fred Murimi, Managing Partner of Centum Capital Partners (CCP).
Centum Capital Partners is targeting Three firms in Kenya and Two in East Africa
He disclosed that three of the targeted firms are based in Kenya while two are in neighbouring countries and that CCP has planned to invest at least KSh 1 Billion annually for the next five years.
Murimi was appointed the Managing Director for Centum Capital in August 2015. He heads Centum Capital, a division of Centum Group, charged with the responsibility of overseeing the execution of the Centum 3.0 strategy through the development of investment-grade opportunities across the key sectors of focus.
Analysts maintain that the COVID-19 pandemic has made valuations attractive for private equity funds as investors seek capital to navigate the new normal and take advantage of emerging business opportunities.
CCP’s current private equity portfolio worth an estimated KSh 9 Billion is spread across East Africa and includes Longhorn Publishers, Isuzu East Africa, Nas Servair and Sidian Bank.
Over the past decade, CCP has deployed KSh 15 Billion into the private equity portfolio and so far realised KSh 37 Billion with the remaining portfolio valued at KSh 9 Billion.
Some of the most recent exits by CCP include Almasi Beverages, UAP Insurance and Kenya Wine Agencies Limited.
Meanwhile, the listed firm has unveiled some strategies to help narrow the gap between its price and net asset value (NAV). The stock has been trading at a third of its NAV.
These strategies include deleveraging the balance sheet and paying down all outstanding debts, smoothening earnings by building an annuity pool and rebalancing its portfolio by re-growing private equity back to around 45.0% of NAV.
Moreover, the listed firm has already begun the process of monetizing its real estate portfolio.
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