Verdant Capital is one of the most active corporate finance firms in the African financial services sector. In June, Verdant was named in Acquisition International’s ongoing Leading Adviser Awards programme as acknowledging their achievements in financing transactions. On the back of that win, we spoke with Edmund Higenbottam, Managing Director of Verdant Capital, to discuss how the company is thriving in the global finance industry.
Recognising the importance of Verdant Capital’s role in the sale of AFB Ghana to Letshego, AI Magazine named the acquisition as the Best African Financing Transaction 2018: Letshego. Since their establishment in 2013, Verdant Capital have made their name on the back of such paradigm-shifting events, from their offices in Johannesburg, Accra, Bene and Kinshasa. More recently, Verdant Capital joined IMAP, the leading global M&A partnership, becoming only the second partner firm on the African continent. In just five years, they have settled into their position as the leading corporate finance firm, partnering with the largest companies working across African and overseas.
To start the interview, Edmund speaks for a moment on Verdant’s position in the current market; “Verdant Capital operates in two segments; financial institutions, where we are the leading debt private placement arranger for mid-market financial institutions in Africa, and corporate finance, where we are a top 20 mergers and acquisitions advisor. Our transaction to sell AFB Ghana, a leading consumer finance lender in Ghana, is really the epicentre of our skills and expertise.”
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Verdant’s overall mission is to be utterly client-centric, with services that naturally extend beyond the usual or expected. Initial acquisitions, or mergers, can require additional funding or acquire companies in turn. The key for Verdant Capital is ensuring that business organically breeds business. “We provide our clients with the highest quality of work and often completed transactions lead to new business directly with parties we approach in our transactions. For example, we sold AFB Ghana to Letshego, the leading pan-African consumer lender with a balance sheet of approx. USD 900 million. We are currently arranging a USD 100 million debt financing for Letshego. We bring specific knowledge and detailed analysis to our projects, and this shows on “both sides of the table”.
Verdant’s attitude to conducting business is aided immeasurably by a need to be different, to stand head and shoulders above the competition in this notoriously competitive sector. Edmund believes a core part of this is in the expertise of Verdant;’s team, who have honed their talents from all corners of the globe. “A critical factor is our global connectivity; the bulk of our transactions involve leading global companies or investors on one side of the transaction or the other. We have invested heavily in our network of relationships around the world. Our senior team brings experience earned in Europe, North America and Africa.”
Moving on to discuss Africa’s investment environment as a whole, Edmund talks about the importance of ongoing direct investment in the region, and how this has impacted Verdant Capital; “In terms of the overall investment environment, Africa continues to enjoy GDP growth at 1% or more above the levels prevailing in the G7. This fact, and high population growth has given credence to an “Africa rising” narrative. The reality is somewhat more nuanced, and these positives are offset by factors such as excessive resource, commodity dependence, significant fiscal and trade imbalances, weak institutions and inconsistent public policy.”
However, Edmund is quick to emphasise that the current situation in Africa is delicate, such as it is, driven by political policy and potentially transient foreign strategy. “There has been an evolution of foreign direct investment into Africa by source. China has grown its share at the expense of the “West” as part of its commodity aggregation story, but also as it seeks to develop a “soft power” strategy. From Western Europe there has been a re-energising of the development finance investor base, as a response to geo-political factors such as mass inward migration and to policy changes including a de-emphasising of aid to the public sector.”
“In short, the investment environment is volatile. Verdant Capital sees significant “two-way” flows, i.e. both selling regionally owned businesses to buyers globally, and international companies selling African operations in whole or part.”
When it comes to the future of Verdant Capital, Edmund relies on the strength of his team to sustain growth for the foreseeable future; “With respect to 2018, we expect a highly successful year based on our current pipeline. We have made significant hires in the course of 2017 to strengthen our team and build upon our capacity to service our clients. Furthermore, we expect to open our fifth office next year.”
Contact: Edmund Higenbottam, Managing Director
Company: Verdant Capital
Address: Northview Building, 57 Sixth Road, Hype Park, Johannesburg, 2196, South Africa
Telephone: 0027 10 140 3700