DealMakers AFRICA 2020 Annual
Selecting those awards
DealMakers Africa’s awards are based essentially on objective evidence – the value of deals or transactions, and the number of them. In limited instances, judgment has to be applied on the categorisation and value ascribed to a particular deal or transaction. In only two of the awards is selection subjective, and we approach these with considerable circumspection; they are the Deal of the Year and the Private Equity Deal of the Year.
The first stage, with both Deal of the Year and Private Equity Deal of the Year, is that the DealMakers Africa editorial team – with nominations from advisory firms – produce a short-list of those it believes best qualify for consideration, with input from the Independent Panel. The papers and press comment on each deal are then bundled and delivered to the members of the Panel.
The Panel ranked the deals on the following criteria:
Deal of the Year:
• Transformational transaction – does the deal or transaction transform the business or even the industry in which it operates? What is the extent of potential transformation as a result?
• Execution complexity – does the overall deal or transaction involve multiple steps/a number of smaller interrelated deals? Are there numerous conditions precedent that need to be fulfilled? Does it involve many and/or complex regulatory approvals? Are there related debt/equity raising processes, and how difficult are they to implement? Was there significant time pressure to conclude the deal/transaction? Did the deal/transaction exhibit innovative structuring?
• Deal size – not an over-riding determinant but a significant factor.
• Potential value creation – to what extent could shareholders and other stakeholders benefit from the transaction over time?
Private Equity Deal of the Year:
(Not awarded for 2020)
• Asset with good private equity characteristics – cashflow generative business and able to service an appropriate level of debt? A business model that is resilient to competitor action and downturns in the economic cycle? Strong management team that is well aligned with shareholders and capable of managing a private equity balance sheet? Predictable capex requirements that can be appropriately funded?
• Deal size – is a factor to filter deals, but plays a limited role for acquisitions. It does carry more weight for disposals.
• Potential/ actual value creation – was the asset acquired at an attractive multiple? If the deal is a disposal, was it sold at an attractive price? What is the estimated times money back and/or internal rate of return?
There is limited information available in the public domain on the private equity deals, and even somewhat educated guess work doesn’t provide all answers in all instances.