Kenya and the East African region are among the most attractive destinations for international and regional investors. The investment environment has steadily grown in the past decade. A survey by KMPG and the East Africa Private Equity and Venture Capital Association shows a sharp increase in the number of private equity transactions in the region from an average of 18 transactions per year in 2015 and 2016, to an average of 42 transactions per year in 2017 and 2018.
In 2017 and 2018, Kenya recorded 61 private equity agreements valued at $1.2 billion (KSh121.2 billion) out of the 84 deals worth $1.4 billion (KSh141.4 billion) transacted in the entire East African region. Unlike other East African countries, Kenya recorded investments in diverse segments such as FMCG, Manufacturing, Financial Services, Telecommunication, Agribusiness, Transport, Energy, Hospitality, and Healthcare.
The financial sector attracted the highest number of investors with 15 transactions. Private Equity firms also expressed keen interest in Kenya’s energy sector and telecommunication sector whereby 9 and 8 deals were signed in the respective industries in 2017 and 2018.
The survey by KMPG and EAVCA predicts an increase in investments in emerging segments such as telecommunication, media, and technology. “As the Private Equity sector moves towards maturity, we expect to see more deal activity in emerging sectors such as Telecommunication Media and Technology, which is taking central stage in shaping all the industries regionally and globally,” read the report.
In terms of Mergers and Acquisitions, 88 transactions valued at over $3.6 (KSh363.6) billion were registered in the country in 2017 and 2018. East African nations collectively recorded 150 mergers and acquisitions with a combined value of $4.7 (KSh474.7) billion.
Some of the notable mergers and acquisitions that occurred in Kenya in 2017 and 2018 are; Vodacom’s purchase of 35 per cent stake in Safaricom for KSh260 billion, Actis investment in Kipeto Energy for KSh30.3 billion, Abraaj Group partial acquisition of Avenue Hospitals for KSh17.3 billion, and CDC’s investment in the Malindi Solar park for KSh6.7 billion.
