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Merger and Acquisition

Pharmaceutical Industry M&A Activity Grew by 17% in H1 2020 amid 56% Drop in Deal Value

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Pharmaceutical Industry M&A Activity Rose by 17% in the First Half of 2020

According to the research data analyzed and published by ComprarAcciones, merger and acquisition (M&A) deal activity in the pharmaceutical sector rose by 17% in H1 2020, disregarding the economic toll of the global pandemic.

It saw a total of 41 deals during the period, but the Q2 2020 deal value total of $3.3 billion was the lowest quarterly total since Q1 2018.

According to PwC, the pharma subsector posted a drop of 56% in deal value from H2 2019 to H1 2020. For the PLS sector as a whole (pharma, biotech and medical devices), the decline in deal value was a massive 87.2% during the same period.

Pharma and Life Sciences (PLS) M&A Total Deal Value Sank from $272.9B to $35B YoY

The total deal value for the pharmaceutical subsector in H1 2019 was $100.1 billion. In contrast, its total deal value in H1 2020 was valued at $7.7 billion.

The PLS sector had a total of 99 deals valued at $35 billion in H1 2020. In H2 2019, the figures were higher, with 129 deals valued at $86.5 billion. H1 2019 was even bigger, with 119 deals valued at a remarkable $272.9 billion.

Meanwhile, for the healthcare industry as a whole, H2 2020 started off with 13 deals valued at $1 billion+ according to S&P Global.

On the other hand, based on a report from Global Data, the global M&A deal value started on a downtrend in Q1 2020. It went from $151.2 billion to $129.9 billion from February to March. Another study from S&P Global shows that the decline carried into Q2 2020, with a 35% drop in deal volume. Similarly, total transaction value dropped by 40%, the highest drop since 2015.

Comparing H1 2020 to H2 2019, the total deal volume sank by 32% year-over-year (YoY) from 10,155 deals to 6,938 according to Merger Market. Deal values sank by 53%, from $1.9 trillion to $901.6 billion during the same period.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Merger and Acquisition

Nigerian Retail-Tech Startup Alerzo Acquires Shago Payments To Boost Growth

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Alerzo, a Nigerian retail-tech startup has acquired fintech company Shago Payments to boost growth. The acquisition of Shago payments will enable the integration of Shago into the company’s payments arm, AlerzoPay.

The new development will provide the informal retail stores access to new digital services such as mobile airtime top-up, bill payments and peer-to-peer transfers.

Founded in 2019, the Ibadan-based retail-tech startup, Alerzo, is an all-in-one technology and services platform that transforms how Nigeria’s informal retail stores operate. Retailers can order stock, have it delivered quickly, receive and make cashless payments, and track store profitability. Alerzo currently works with more than 150,000 informal retail stores.

The startup announced a US$10.5 million Series A round, led by London-based Nosara Capital, in August, and since then has more than doubled its revenues and built a payments business. The latter was facilitated by the recent acquisition of Shago Payments, a fintech startup founded by payments industry veteran Sabastine Enechi.

Alerzo has also expanded its operations to the Middle Belt and Northern regions of Nigeria and now operates in Abuja and Kano. The company plans to serve most of Nigeria before the end of next year.

Alerzo Founded by Adewale Opaleye, said he created the company to meet a core need that his mother, a businesswoman, had at the time.

“I started Alerzo to help my mom, a single mother who ran two informal retail stores to support me and my three siblings. Before Alerzo, she had to close her shop and travel for hours to buy the inventory to stay in business.

“Women are often victims of theft because street boys know retail store operators often carry cash. I wanted to apply what I learned in China to make life better for working mothers in Nigeria.” He said.

Today, Alezo one of the fastest-growing startups in Nigeria, announced that its annualized September transaction volume had grown more than five times since the beginning of 2021, exceeding $155 million.

Commenting on the acquisition, Iyinoluwa Aboyeji, the co-founder of Flutterwave and Andela and a member of Alerzo’s advisory board, said that the firm’s decision to serve communities “that are truly excluded” was inspiring: “Alerzo’s focus on excluded but commercially viable commerce communities in smaller cities like Ibadan is exemplary and visionary.”

He also said most businesses “talk a good game” about financial and economic inclusion but then proceed to focus their businesses on commercially savvy megacities like Lagos or Nairobi.

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Merger and Acquisition

Sub Saharan Africa Mergers and Acquisition Transactions Totalled US$ 78.3 Billion During First Nine Months of 2021

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Refinitiv today released the Sub-Saharan African investment banking analysis for the first nine months of 2021. According to the report, an estimated US$387.5 million worth of investment banking fees were generated in Sub-Saharan Africa during the first nine months of 2021, a 15% increase from the same period in 2020. 

While debt capital markets underwriting fees increased 148% to US$117.8 million, the highest year-to-date period since our records began in 2000, fees from equity capital markets underwriting, M&A advisory and syndicated lending all declined from the first nine months of 2020.  Equity fees declined 17% to US$50.7 million, while syndicated lending fees declined 4% to US$148.2 million. Advisory fees earned in the region from completed M&A transactions reached US$70.8 million, down 3% from last year to the lowest first nine-month total since 2013.  Fifty-eight percent of all Sub-Saharan African fees were generated in South Africa during the first nine months of 2021, and 23% were earned from deals in the financial sector. Standard Chartered earned the most investment banking fees in the region during the first nine months of 2021, a total of US$33.1 million or an 8.5% share of the total fee pool.

MERGERS & ACQUISITIONS

Boosted by the US$44.1 billion Naspers/Prosus share swap in May, the value of announced M&A transactions with any Sub-Saharan African involvement reached US$78.3 billion during the first nine months of 2021, more than four-times the value recorded during the same period last year and the highest first nine-month total since our records began in 1980.  The number of deals increased 4% from last year to a three-year high of 584.

M&A involving a Sub-Saharan African target reached US$61.8 billion, again lifted by the share swap to an all-time record first nine-month total, while the number of deals increased 8% over last year.  Inbound deals, involving an acquiror outside of Sub-Saharan Africa, increased 86% to US$9.6 billion, while Sub-Saharan African outbound M&A more than doubled to US$11.5 billion. With advisory work on deals worth a combined U$52.1 billion, Morgan Stanley held the top spot in the financial advisor ranking for deals with any Sub-Saharan African involvement during the first nine months of 2021.

EQUITY CAPITAL MARKETS

Sub-Saharan African equity and equity-related issuance reached US$971.2 million during the third quarter of 2021, the highest quarterly total in more than two years.  Despite the strong third quarter, total proceeds raised during the first nine months of 2021 was down 42% from last year at US$1.2 billion, the lowest first nine-month total since 2005.   Pepkor Holdings, Lighthouse Capital and retail pharmacy chain Dis-Chem Pharmacies were among those in the region raising new equity funds from follow-on offerings during the third quarter.  There have been no initial public offerings in the region so far during 2021. Investec and Goldman Sachs share first place in the Sub-Saharan African ECM underwriting league table during the first nine months of 2021. 

DEBT CAPITAL MARKETS

Sub-Saharan African debt issuance totalled US$37.2 billion during the first nine months of 2021, up 149% from the value recorded during the same period in 2020 and the highest first nine-month total since our records began in 1980.  The number of issues increased 33% over the same period.  US$15.2 billion worth of the bond proceeds were raised during the third quarter alone, with both Prosus and the Federal Government of Nigeria raising US$4.0 billion.  Government & Agency issuance accounted for 55% of proceeds raised during the first nine months of 2021, while the financial sector accounted for 24%. Citi took the top spot in the Sub-Saharan African bond book runner ranking during the first nine months of 2021, with US$6.0 billion of related proceeds, or a 16% market share.

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Merger and Acquisition

Access Bank Completes Acquisition of African Banking Corporation of Botswana Limited

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Herbert Wigwe - Investors King

Africa’s leading bank, Access Bank Plc has now completed the acquisition of a 78.15 percent shareholding in African Banking Corporation of Botswana Limited (BancABC Botswana).

Access Bank announced in a statement signed by Sunday Ekwochi, Company Secretary, Access Bank Plc.

According to the lender, the new acquisition will form part of the Bank’s nexus for trade and payments in Southern Africa and the broader COMESA trade region.

BancABC Bostwana is the fifth-largest bank in Botswana and is a well-capitalized franchise poised for growth in its local market. The lender’s achievements in the retail banking space will provide an opportunity for the Bank to deploy its best-in-class digital platforms and product suites to the benefit of BancABC Botswana’s customers and enable it to complete strongly across its core business segments.

Commenting on the transaction, Dr. Herbert Wigwe, GMD/CEO of the Bank, “We are pleased with the successful conclusion of this transaction which will provide significant synergies by combining BancABC Botswana’s strong retail banking operation with Access Bank’s wholesale banking capabilities. It will also strengthen the quality of earnings through revenue diversification and growth in the corporate and SME banking segments for BanABC Botswana. The combination is another step towards our broader vision of becoming the world’s Most Respected African Bank.”

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