Mergers and Acquisitions

Africa Analysis has undertaken various due diligence projects in M&A deals. Africa Analysis’ roles have included the following:

  • Lead
  • Market / commercial / financial due diligence
  • Technical due diligence
  • Company valuation

These projects demonstrate the role that Africa Analysis has undertaken in these types of projects.

African Telecommunications Operator Analysis (multi-country study)

Africa Analysis formed part of a project team (along with a global telecommunications market analysis and consulting firm) tasked with undertaking aspects of a comprehensive due diligence on the African operations of a European fixed-line and mobile telecommunications operator. The operator’s African assets were located primarily in southern Africa. This project was undertaken for a European private investment house looking to expand its investment portfolio in the African telecommunications sector. As a result of the work, the European investor successfully acquired part of the operator’s African assets.

Data Network Operator

A pan-African retail internet service provider retained the services of Africa Analysis to undertake a due diligence across a number of smaller data service provider operating in its market. The project included commercial and financial due diligence. On the basis of the outputs of this project, the client took the decision to make a bid for the data service provider’s operations.

Fixed-line Operator

This project, undertaken for an international PSTN operator, was aimed at conducting a due diligence study on an African PSTN operator in which the international operator was bidding to purchase an equity stake. The project required a detailed assessment, undertaken in-country, of the African PSTN operator’s market position and strategy. The outputs of the project assisted the client in developing a corrective marketing strategy as part of its equity bid and thus aided the investment decision.

Fixed-line Operator Market Analysis

This project encompassed a comprehensive due diligence of an African fixed-line operator with which an international operator proposed to enter into a joint venture. The analysis of the telecommunications market supported through primary research was a key input used to analyse the marketing position of the PSTN operator. In addition, the independent determination of the level of demand for a range of telecommunications services and the sizing of the market enabled the international operator to develop an appropriate market strategy. The field research, conducted in French by our analysts and our partners in the Central Africa country, consisted of 320 corporate/business interviews across the country. The result of the research and analysis afforded the client a thorough understanding of the Central African country’s telecommunications market and served as an input into assessing the opportunity for participation in that market.

Fixed-line Operator Market Analysis

This project encompassed a comprehensive due diligence of a North African fixed-line and mobile operator in which a pan-African operator sought to become a shareholder. The analysis of the telecommunications market supported through primary research was a key input used to analyse the marketing position of the PSTN operator. In addition, the independent determination of the level of demand for a range of telecommunications services and the sizing of the market enabled the pan-African operator to gauge the size of the opportunity and develop an appropriate strategy. Africa Analysis was part of a broader due diligence team, based out of Paris, France. The specific role assigned to Africa Analysis was to evaluate the fixed-line operations and forecast the telecommunications country market along a number of variables over a 10-year forecast period. The result of the research and analysis afforded the client a thorough understanding of the North Africa country’s telecommunications market and served as an input into assessing the opportunity for participation in that market.

Pan-African VSAT & Broadband Service Provider

This project was undertaken for one of the major African fixed-line operators, evaluating the opportunity presented by the possible acquisition of a VSAT and broadband service provider active in a number of markets in sub-Saharan Africa. The project required development of a business plan, including market and financial analysis models for the various country markets and services offered by the service provider. Market modelling focused on the future growth of the service provider’s subscriber base and market share. Financial analysis was performed to operational expenditure (opex) and EBITDA margin level. In both instances, forecasts were provided for a period of 10 years. The outputs of the project assisted the client in making a decision to bid for the service provider’s operations.

Telecommunications Operator

This project, undertaken for an international operator, was aimed at conducting a due diligence study on a West African incumbent who was selling 51% equity. The project required a detailed assessment, undertaken in-country, of the fixed, mobile and broadband markets, the development of the project market share and revenue, and the development of the business case supporting the investment decision. Africa Analysis worked closely with the lead investment bankers in developing the bid document. The outputs of the project enabled the client to assess the bid range for the 51% equity in the operator.

Wireless Data Operator Due Diligence

Africa Analysis was retained by a large bank in a West African market to undertake a due diligence on a wireless data operator to which the bank had extended significant funding. The operator wished to receive further funding, in order to implement new technology and become more competitive in the market. Our task involved the operator and market analysis along three key areas: (1) Did the operator have adequate internal resources to become more competitive in the market?; (2) Was the technology already used by the operator adequate to become more competitive in the market, or should new technology be introduced? (3) Were market conditions from a competitiveness point of view conducive to the operator’s improved performance? We undertook internal company due diligence (human resources) on the operator’s senior management and technical staff; competitive market analysis; and technical due diligence on the technology and operational / back-end systems used by the operator. The results of our analyses, along with our recommendations, were presented to the investor, who used them to make a decision regarding additional funding of the operator.