AfricInvest and Catalyst Principal Partners Acquire Minority Stake in Kenya’s Prime Bank

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Tunisia-based AfricInvest and Kenya’s Catalyst Principal Partners have jointly acquired a significant minority stake in Prime Bank, a Kenya-based lender headquartered in the capital city of Nairobi.

The two private equity firms made the announcement this week, stating that the investment was carried out through a special purpose vehicle known as AfricInvest Azure.

AfricInvest Azure was formed jointly by AfricInvest and Catalyst.

AfricInvest has been active in the continent and recently closed a 194 million Euro fund deal aimed at investing in small and medium-sized enterprises (SMEs) in North Africa. In November, AfricInvest announced that it had invested in Les Centaures Routiers (LCR), the largest independent transportation company in Cote d’Ivoire.

Meanwhile, Catalyst Principal Partners announced the close of its second fund, achieving $155 Million of capital commitments from leading international and regional investors in November, 2018, as a successor to its Catalyst Fund I, a $125 million fund raised in 2009.

As a result, Catalyst cemented its position as the leading regional private equity fund manager with the largest pool of funds under management amongst its peers dedicated to the East African region.

Now the two firms have set their sights on Prime Bank. Though the terms of the deal remain scant, it has allegedly emerged that the two firms had acquired a 24% stake in the lender after putting in Ksh5.1 billion ($50.10 million).

Prime Bank was founded in 1992 by local investors. The lender controls less than 2% of Kenya’s banking sector assets. It focuses on corporate banking and it recently acquired an insurance subsidiary.

The acquisition comes six months after Prime Bank confirmed that its management was holding talks with private equity funds to sell an undisclosed stake. In July 2018, it had emerged that the lender was keen to bring new investors on board to finance its local and regional expansion plans.

It appears that these plans are beginning to take shape.

Prime Bank operates more than 20 branches and currently has a regional presence in Malawi, as well as Botswana, Mozambique, Zambia and Zimbabwe. The lender is now poised for further expansion.

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