Adrian Mayer discusses the impact of COVID-19 on deals across Africa in an interview with Africa Global Funds.
Africa Global Funds (AGF): Please tell us about Charles Russell Speechlys and your Africa practice.
Adrian Mayer (AM): We are an international law firm headquartered in London with a long history of advising clients across Africa, particularly in relation to private equity, M&A, commercial and residential property development, disputes and capital markets work; with particular sector expertise in natural resources and renewables, financial services, real estate (including agri businesses) and technology, media and telecoms. Our Africa Team includes lawyers from across our offices in the UK, Europe and the Middle East, some of whom are also qualified in other jurisdictions. We don’t have offices in Africa but work and have relationships with some of the best independent law firms across the continent.
AGF: How has COVID-19 immediately impacted on deals in Africa?
AM: Deal activity slowed down in April to June (as it did in other markets), some deals falling over, and others not being able to progress as expected because of lockdowns and travel restrictions; but we are seeing activity picking up and expect things to develop further in several countries and sectors in Q4. Technology has enabled us to keep in regular touch with clients and allowed us to keep deals going. We have continued to be active, and are currently advising on agri business, real estate and renewable energy mandates in sub-Saharan Africa. Also, we recently advised the management in the sale of GHL Bank to the First National Bank of Ghana.
AGF: What are your thoughts on longer-term trends following the pandemic?
AM: In many ways it is still too early to tell, but investors are unsurprisingly looking at managing and working on their existing portfolio investments at present. In addition, the market for M&A has become more buyer friendly, and this may change the way exits and sales are managed and priced. Of course those investors with funds recently raised will be looking for investment opportunities, so the market will still be active. Those business accepting further, or new, investment or making divestments will need to consider how to deal with the realities of COVID-19 in their country and or sector in terms of making propositions as attractive as possible. There are of course clients of ours based in, and operating across, Africa who continue to need our input on a whole range of matters, and depending on the sector and location, the impact of COVID-19 has been varied. There will be a move towards making changes to how businesses are managed with the entrenchment and codification of virtual meetings and remote management, which will be an emerging trend for many clients. We are also seeing some clients being creative around how due diligence is undertaken on new investments, and also becoming more focussed on sectors and business types they already know well when looking at new investments.
AGF: Where do you see opportunities for investors in Africa?
AM: There have always been great opportunities for investors in Africa, and that hasn’t changed, but at present caution and care with deal choice are key. However, when things pick up we expect to see more investments in technology, agriculture and healthcare than we did before the pandemic. Those investors with “dry powder” and experience of Africa will be able to find that there could be interesting “roll up” and scaling opportunities that will complement their existing portfolio businesses. In addition, the residential property market would also be a key sector going forward and we may see some increased investor appetite in affordable housing initiatives.
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