NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, June 18, 2014

VENTURES AFRICA – New-York based global private equity company; KKR & Co. has expressed interest in buying a percentage of leading Ethiopian flower company, Afriflora which grows about 730 million flowers for export yearly.

According to reports, KKR intends to invest about $200 million of its $6.2 billion European fund in the deal that will be its first investment foray into Africa. The deal will in turn help to fund Afriflora expansion plans.

“We see Africa as a long-term attractive investment destination… the potential is astounding. But the work to get there is going to be considerable,” said Head of KKR’s African operations Kayode Akinola.

KKR is known for its leveraged buyout (LBO) of RJR Nabisco of RJR Nabisco in 1988, a deal presumed the subject of the book: “Barbarians at the Gate” authored by investigative journalists Bryan Burrough and John Helyar.

KKR’s investment is coming in at a time when private equity investment on the continent is on the rise and the continent is deemed one of the fastest growing economic regions after Asia.

According to the Emerging Markets Private Equity Association report, private-equity investment in sub-Saharan Africa is about $1.6 billion in 2013, a 43 percent increase over the previous year. An African Development Bank (AfDB) report also predicts an $84.3 billion foreign investment inflow this year.