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Merger and Acquisition

Reactions as Equinix is Set to Acquire Nigeria Based MainOne in a $320 Million Deal

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Equinix, yesterday, announced its intended acquisition of MainOne, a leading West African data centre and connectivity solutions provider, with a presence in Nigeria, Ghana and Côte d’Ivoire. The acquisition has been pegged at $320 million.

The acquisition is expected to close Q1 of 2022 subject to the satisfaction of customary closing conditions including the requisite regulatory approvals.

Following the announcement, several people are already expressing their views about the intended acquisition.

Aside from the many congratulatory messages and accolades showered on the Funder of Mainone, Mrs Funke Opaka, some believe that there are suspicions in the deal.

A Twitter user Osamarine Victor Asemota said “who wants to do a Twitter space conversation about the MainOne deal tonight? We should do more analysis of these things more often. Something doesn’t quite sit right with me on it. Was it competition they were afraid of? Why not sell to Google or Facebook?”

Subsidy? If mainOne has at least 3 fibre termination in every state, lots of folks like me would walk around last-mile coverage, if their bandwidth cost would be reasonable. At supposedly less than 20% capacity utilization, deeper penetration would be the deal-breaker,” another Twitter user wrote.

“I am actually shocked to read about the deal just this morning. There was no indication that it was going to happen. And to be selling to a relatively unknown buyer again! I remember stories about the owner in the papers about some management issues, maybe that contributed to it,” Adewale wrote.

Mainone had $200MM in debt financing right? They weren’t making enough to make a dent on those debts in the last 8 years. Their valuation isn’t that low.”

“You only know the true story of a company when you have access to their financial records. Most stories on Internet about companies’ successes are half-truths,” Francis wrote.

MainOne was founded in 2010. The company has enabled connectivity for the business community of Nigeria and beyond. MainOne’s assets include:

Three operational data centres, with an additional facility under construction expected to open in Q1 2022. These facilities will add more than 64,000 gross square feet space to Platform Equinix, in addition to 570,000 square feet of land for future expansions.

An extensive submarine network extending 7,000 kilometres from Portugal to Lagos, Accra and along the west African coast, with landing stations in Nigeria, Ghana and Côte d’Ivoire.

A terrestrial network of more than 1,200 kilometres of reliable terrestrial fibre in Lagos, Edo and Ogun States. Connectivity to terrestrial sites extends across 65 PoPs (points of presence) in cities across Portugal, Nigeria, Ghana and Cote d’Ivoire.

Access to key internet exchanges enabling low latency to key global networks, including Amazon, Microsoft, Apple, Google and Facebook.

An estimated 800+ business-to-business customers, including major international technology enterprises, social media companies, global telecommunications operators, financial service companies and cloud service providers.

Nearly 500 employees and a management team with a deep understanding of local and international markets.

The acquiring company, Equinix, on the other hand is comprised of 237 data centres across 65 metros and 27 countries, providing data centre and interconnection services for over 10,000 of the world’s leading businesses.

In a statement released yesterday MainOne founder, Mrs Opaka, expressed her delight with the acquisition. “Equinix will accelerate our long-term vision to grow digital infrastructure investments across Africa. I thank our founding shareholders led by Mr. Fola Adeola, MainStreet Technologies, AFC, PAIDF, FBN, Polaris and AfDB for investing in the MainOne vision to bridge the Digital Divide in Africa. With similar values and culture to what we have jointly built in twelve years, Equinix is the preferred partner for our growth journey. The MainOne team is excited about the partnership created through the acquisition, and we look forward to building our next chapter together,” she said.

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Merger and Acquisition

Sullivan, Ellis Were Top M&A Legal Advisers by Value and Volume in financial Services Sector in 2021

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Sullivan & Cromwell and Kirkland & Ellis were top M&A legal advisers by value and volume in financial services sector for 2021, finds GlobalData.

Sullivan & Cromwell and Kirkland & Ellis were the top mergers and acquisitions (M&A) legal advisers in the financial services sector for 2021 by value and volume, respectively, according to GlobalData. The leading data and analytics company notes that Sullivan & Cromwell advised on 42 deals worth $105.1 billion, which was the highest value among all advisers tracked. Meanwhile, Kirkland & Ellis led by volume, having advised on 76 deals worth $20.1 billion. A total 3,854 M&A deals were announced in the sector during 2021.

According to GlobalData’s report, ‘Global and Financial Services M&A Report Legal Adviser League Tables 2021‘, deal value for the sector increased by 21.1% from $430.6 billion during 2020 to $521.3 billion during 2021.

Aurojyoti Bose, Lead Analyst at GlobalData, comments: “Kirkland & Ellis was the only advisor that managed to advise on more than 70 deals during 2021. However, it lagged behind in terms of value and did not find a place among the top 10 by value due to involvement in low-value transactions.

“The average deal size of transactions advised by Kirkland & Ellis was just $264.2 million, while it was $2.5 billion for Sullivan & Cromwell. Apart from leading by value, Sullivan & Cromwell also occupied the fourth position by volume.”

Wachtell Lipton Rosen & Katz occupied the second position in terms of value, with 26 deals worth $79.1 billion; followed by Skadden, Arps, Slate, Meagher & Flom, with 54 deals worth $55.9 billion; Simpson Thacher & Bartlett, with 37 deals worth $51.6 billion; and Cravath Swaine & Moore, with nine deals worth $47.6 billion.

Alston & Bird occupied the second position in terms of volume, with 55 deals worth $7.9 billion; followed by Skadden, Arps, Slate, Meagher & Flom, and Sullivan & Cromwell. Willkie Farr & Gallagher occupied the fifth position by volume, with 42 deals worth $13.8 billion.

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Merger and Acquisition

Sub Saharan Africa Mergers and Acquisition Transactions Totalled US$ 129.7 Billion in 2021

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Refinitiv today released the 2021 investment banking analysis for the Sub-Saharan African. According to the report, an estimated US$506.0 million worth of investment banking fees were generated in Sub-Saharan Africa during 2021, 8% less than in 2020 and the lowest annual fee total in the region since 2014.  While debt capital markets underwriting fees increased 128% to US$150.3 million, the highest full year total since our records began in 2000, fees from equity capital markets underwriting, M&A advisory and syndicated lending all declined from 2020. 

Equity fees declined 35% to US$56.9 million, while syndicated lending fees declined 17% to US$216.0 million.  Advisory fees earned in the region from completed M&A transactions reached US$82.9 million, down 38% year-on-year to the lowest annual total since 2003.  Fifty-five percent of all Sub-Saharan African fees were generated in South Africa during 2021, and 25% were earned from deals in the financial sector. Standard Chartered earned the most investment banking fees in the region during 2021, a total of US$37.7 million or a 7.5% share of the total fee pool.

MERGERS & ACQUISITIONS

The value of announced M&A transactions with any Sub-Saharan African involvement reached US$129.7 billion during 2021, more than four-times the value recorded during 2020 and the highest full-year total since our records began in 1980.  The high dollar-value was boosted by the Naspers/Prosus share swap in May, and Redefine Properties’ offer for the remaining shares in retail property company EPP, which together were worth a more than US$70 billion.  The number of deals increased 13% from 2020 to a four-year high of 853.

M&A involving a Sub-Saharan African target reached US$79.6 billion, again lifted by the share swap to an all-time record annual total, while the number of deals increased 21% over the previous year.  Inbound deals, involving an acquiror outside of Sub-Saharan Africa, increased 164% to US$20.1 billion, while outbound M&A reached an all-time high of US$42.3 billion.

High technology was the most targeted sector by value in Sub-Saharan Africa during 2021, while the materials sector saw the highest number of deals in the region.  South Africa was the most targeted nation, with US$63.7 billion in M&A announcements over the year, equivalent to 80% of total activity recorded in the region.

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 2021.

EQUITY CAPITAL MARKETS

Sub-Saharan African equity and equity-related issuance reached US$1.4 billion during 2021, down 43% compared to 2020 and the lowest annual total since 2005.  The number of issues declined 38%, again to a 16-year low.  Issuers in South Africa raised more in the equity capital markets than any other Sub-Saharan African nation during 2021, a total of US$979.6 million, followed Mauritian and Ugandan issuers.

Follow-on offerings raised US$1.3 billion in 2021 with Pepkor Holdings, Lighthouse Capital and financial services group FirstRand Ltd among those in the region raising new equity funds from follow-ons in 2021.  Just one initial public offering was recorded in the region during 2021, MTN Uganda raised U$163.0 million listing on the Uganda Securities Exchange in December. Investec and Goldman Sachs share first place in the Sub-Saharan African ECM underwriting league table during 2021, each with a 24% market share. 

DEBT CAPITAL MARKETS

Sub-Saharan African debt issuance totalled US$43.5 billion during 2021, up 125% from the value recorded during 2020 and the highest full-year total since our records began in 1980.  The number of new offerings brought to market increased 46% over 2020 to a four-year high of 73.  South Africa was the most active issuer nation during 2021, accounting for 26% of total bond proceeds, followed by Ivory Coast and Nigeria with 22% and 16%, respectively.  DCM activity from Government & Agencies accounted for 51% of issuance during full year 2021, while financial sector issuance accounted for 26%. Citi took the top spot in the Sub-Saharan African bond book runner ranking during 2021, with US$6.7 billion of related proceeds, or a 16% market share.

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Merger and Acquisition

Nigerian Owned Pleasures Magazine Founder Adedotun Olaoluwa Acquires American Media Giant Gannett’s Shares

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Globally acclaimed Dotmount Communications Group, publishers of Pleasures Magazine today announced its acquisition of Gannett Co.Inc’s shares, a highly respected diversified news and media information company that operates in broadcasting, publishing, and digital, in a move expected to enhance the Dotmount Communications’s global reach with comprehensive integrated services for a strong stable of clients and projects.

Gannett (GCI) is a diversified news and media information company that operates in broadcasting, publishing, and digital. The most famous brand the company owns is USA Today. Its broadcasting segment runs 43 TV stations; its publishing segment provides daily content through more than 80 daily publications and more than 400 non-daily local publications; and its digital segment covers content through digital platforms, digital marketing services, and an online HR software solution.

“In just ten years of existence, the parent company of Pleasures Magazine, Dotmount Communications Group has made an extraordinary impact in the ever-evolving world of media and digital marketing — establishing itself as an emerging dominant player in the field, we are thrilled with this addition to our growing roster of media platforms,” says Adedotun Babatunde Olaoluwa, President and Executive Chairman of Dotmount Communications Group.

“We respect and recognize that chairman Mike Reed has been at the forefront of thought leadership about the convergence of media platforms – and his team’s abilities will be great assets for our firm.”

Dotmount’s new acquisition comes on the heels of a string of acquisitions over the past two years. Since fall 2019, the company has snapped up shares from major media companies.

Dotmount Communications Group, an international strategic communications consultancy that uses an in-depth understanding of public, commercial and political drivers to provide insightful strategic counsel and meet complex communications challenges.

The group has over the years supported government, corporate and private entities, delivering sophisticated communications programmes that shape awareness, guide opinion and enhance understanding on a national, regional and international basis.

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