- Exit represents nearly 3x firm's initial investment, highlights strength of mobile telecommunications in Africa
Emerging Capital Partners LLC (ECP), an international private equity firm focused on investing across the African continent, today announced the sale of its entire position in Starcomms, a leading Nigerian mobile telecommunications operator. ECP's exit was made through a private placement of the company's shares. The shares were then listed on the Nigerian Stock Exchange (NSE), making Starcomms the first listed Nigerian telecom company on the NSE. The exit represents 2.9x ECP's initial investment, with total proceeds of U.S. $99.1 million.
ECP made its initial investment in Starcomms in 2005 and committed additional capital over the next two years for a total investment of U.S. $34.3 million. ECP's investments helped Starcomms expand its telecom infrastructure and grow its customer base from approximately 100,000 subscribers to 1.5 million. Today, the company is Nigeria's fourth largest telecom operator and the largest CDMA 3G mobile operator.
"Over the course of ECP's investment period, Starcomms has become more competitive in the Nigerian telecom sector and has significantly grown its subscriber base," said Hurley Doddy, chief operating officer of ECP. "We are proud to have worked with such a well-governed, world-class operator while the company expanded its national footprint, developed new services, and generated top corporate business accounts."
ECP invested in Starcomms alongside Actis, an emerging markets private equity fund manager. Actis invested in Starcomms at the same time as ECP and on the same terms and conditions. The firms, whose goals in terms of liquidity and governance were similar, structured the voting interest in Starcomms to be separate from the economic interest. ECP and Actis controlled the company by retaining a majority of the voting rights while holding a minority of the economic interest.
"ECP has been an important strategic partner for Starcomms," said Maher Qubain, chief executive officer of Starcomms. "The firm helped us improve our management, operations and corporate governance and enabled us grow to the point that the company is now ready to be publicly traded. We look forward to continuing to build upon this base of success as we move Starcomms into the next stage of its growth."
ECP's investment in Starcomms was made through the firm's AIG African Fund Infrastructure Fund. The U.S. $407 million fund was established in 2000 to invest in infrastructure and related industries in Africa. During its commitment period, the fund invested primarily in telecommunications, natural resources, agribusiness, transportation, and power and water.
Emerging Capital Partners (ECP) is the first private equity group to raise more than US$1.5 billion for investment in companies across the African continent. The firm's investment strategy is focused on delivering consistently above-market returns to investors that are uncorrelated to the U.S. and other global economies. Today, ECP has an eight-year track-record of investing in Africa. |