+
Private equity

Pricing

Many of the drivers of price changes are unobservable, so it is often difficult to interpret changes over time. We assess the data available.

Introduction Fundraising over time Dry Powder Investment activity over time Exits Changes in perceived risk and reward Private Equity Pricing Conclusion

Only includes aggregate data with sufficient observations to be meaningful.
Bubble size –average EV transaction size

Historically, the range of EV/EBITDA multiples across sectors and company sizes were relatively small. Our latest data indicates that IT and the consumer discretionary sector remain with the highest investment activity. However, the quantum has increased significantly.

Between 2010 and 2015, the highest median EV/EBITDA multiples throughout the Africa ex SA region were seen in consumer staples (6.66x), financials (7.14x), and the consumer discretionary (7.22x) sectors. These promise high growth due to African demographics. Accordingly, they also accounted for the highest number of transactions over the same period. Financial multiples have taken the lead in recent periods.

The median multiple within the IT sector for Africa ex SA of 8.53 slightly exceeded the full period (2006– 2021) median of 7.2x, following highs reached between 2016 and 2018 at 9.5x. The increased interest in, and maturing of, the sector over the same period most likely drove the growth. Similar trends are observed in the South African market, with highs of 11.1x between 2016 and 2018, and 6.3x in the more recent periods.

The financial sector has seen an uptick within both Africa ex SA and South Africa, with transaction numbers and multiples in Africa ex SA and South Africa being 46% and 19% higher, respectively. This is possibly a result of the higher growth prospects within the financial sector across the broader African spectrum.
Previously, the largest value transactions fell within the communications sector. However, energy took the lead of highest spend in Africa ex SA in recent periods. This speaks to the increased activity in this sector and significant investment commitments required, notably in western Africa.

While our data does not show much activity in the communication sector in South Africa between 2010 and 2015, the communication service’s multiple increased 54% versus the prior three-year period. Most deals in this sector were focused on interactive media services and wireless telecommunication services companies.

Prev By Deal Size
Next Conclusion

Private Equity

This research aims to highlight the current state of the private equity market in Africa, and trends in prices paid for private equity assests over time.

learn more

Introduction

This Bright Africa Private Equity report focuses on the PE ecosystem in 2021 – including fundraising, dry powder, investments and pricing – and considers some interesting trends.

learn more

Fundraising over time

Before the remarkable market contraction in 2020 and 2021, private equity (PE) fundraising activity across Africa showed strong growth between 2016 and 2019.

learn more