Africa-focused private equity firm Jacana Partners has merged with Nairobi, Kenya-based peer InReturn Capital, which will create an SME investor with coverage across the continent that will manage a new $75m fund expected to close later this year.
InReturn Capital will rebrand as Jacana Partners as part of the deal, marking the first phase of a legal merger that is expected to close in the first quarter of 2013.
The East African firm’s investee companies stand to benefit from the merger, with increased access to private equity investment, dedicated on-the-ground investment teams, international expertise and larger deal sizes of between $1m and $5m, up from its current deal size of $0.5m to $1.3m.
Jacana said the rebranding and subsequent merger is the rational next step for a partnership that has been running successfully for three years and follows the rebranding of Jacana’s West African operations, previously Fidelity Capital Partners, in August last year.
Jacana has invested more than $20m to date in 20 portfolio companies. The firm has made five investments in East Africa to date, comprising a stone quarry, an eye care centre, a supplier of tarpaulins to the relief sector, a serviced office provider and a logistics company.
“Jacana’s unique model combines international private equity experts with highly-experienced local teams, meaning our entrepreneurs benefit from strategic advice from international business experts as well as dedicated African investment managers on-the-ground who can add-value and provide hands-on management support,” InReturn Capital partner Anthony Gichini said in a statement.
Jacana CEO Simon Merchant, pictured, added, “By merging our African and European operations, we are consolidating our business into a single fund manager, operating under the Jacana brand.
“As well as investing the remaining capital from our existing funds, the new Jacana will deploy a new $75m SME fund that we are currently in the processing of raising from international investors.
“The new fund will allow us to significantly increase the scale and geographic reach of our operations and will be invested in SMEs in up to eight countries in East and West Africa.”
Jacana currently operates in Ghana, Kenya, Liberia, Sierra Leone, Tanzania and Uganda and intends to move into two new countries with the new fund, such as Ethiopia, Nigeria and/or Francophone West Africa.
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