UK private equity firm Helios acquires majority stake in Telkom Kenya

Helios said the transaction also included an increase in the Kenyan government’s stake in the telecoms provider from 30% to 40% (200 KB / 2-page PDF).

Helios co-founder and managing partner Babatunde Soyoye said the firm was ready to work with all stakeholders to “transform Telkom Kenya into a successful telecommunications operator” for the country and to develop the country’s telecoms sector.

Kenya National Treasury cabinet secretary Henry Rotich said: “We have seen the positive impact of Helios’ investments in other sectors of our economy and we hope and trust that their investment in Telekom Kenya will have a transformative impact on the operations and standing of the company.”

Helios is an Africa-focused private investment firm managing funds totalling around $3 billion.

A report published last month said prices paid by PE firms for stakes in African companies are at a six-year high, with global investors showing “strong interest in investing in Africa’s real economy”.

Total value of Africa PE funding in 2015 was $4.3bn, according to the 'Bright Africa' report on the industry by Cape Town-based RisCura Solutions (Pty) Ltd.

The report said: “Some of the largest African private equity funds seen to date were closed in 2015, including Helios Investors Fund III ($1.1bn), Abraaj Africa Fund III ($990 million) and African Development Partners Fund II ($725m).”

According to the World Bank, services exports in Kenya have accounted for more than 50% of the increase in total exports since 2005 and are poised to overtake goods exports. Trade, transport, information and communications technology and financial services “lead the pack” of services, said the bank’s ‘Kenya Country Economic Memorandum’ for 2016 (164-page / 8.01 MB PDF).

Kenya’s growth in mobile communications has been due in part to “innovative solutions” such as the country’s M-Pesa mobile money network, the bank said. “For example, there are more than 40,000 M-Pesa retail agents who also sell other products and services.”

The Communications Authority of Kenya (CA) said earlier this year that the emergence of new electronic commerce services in the country’s rapidly-expanding telecoms market was set to increase already “stiff competition” for the country’s traditional postal and courier sectors.

According to the CA’s quarterly sector statistics report, subscriptions to mobile telecoms services increased by nearly 33% during the first quarter of Kenya’s 2015-16 (July-June) financial year and the market now has a penetration rate of almost 90%.