Deal Summary
On 21 November 2024, Tana Africa Capital, a Mauritius-based investment firm, and Morocco-based Saham Group completed the sale of their combined 85% stake in Flipper International School (FIS) to ADvTECH Group, a prominent South African private education provider listed on the Johannesburg Stock Exchange (JSE). The remaining 15%, held by the school’s founders, Menna Selamu Bekele and Serkaddis Seifu Yeteshawork, was also sold, resulting in 100% ownership by ADvTECH. The deal, valued at $7.5 million (R135 million), allocated $6.38 million to Tana Africa Capital and Saham Group. Founded in 1998, Flipper International School operates across five campuses across Addis Ababa. In 2018, Tana Capital and Saham Group acquired an 85% stake in FIS. The funds from this investment were instrumental in financing the development of a state-of-the-art campus in Addis Ababa’s Summit area, significantly enhancing the school’s infrastructure and reputation. This sale to ADvTECH, a strategic buyer, follows Tana’s successful
Deal Rationale
The education sector in Africa is seeing increased consolidation as regional and international players seek footholds in high-growth markets. This trend likely contributed to Tana Africa Capital’s strong exit valuation. For example, in 2018, Scholé Limited partnered with ADvTECH to acquire Makini Schools in Kenya, reflecting a broader appetite from strategic buyers for scalable and well-positioned private education assets. The education sector in Africa is increasingly attractive to international investors due to its rapid demographic growth, urbanisation, and rising demand for private education. With 70% of its population under 25 and rapid urbanisation in Addis Ababa, Ethiopia exemplifies this potential. Flipper International School became an appealing target following substantial infrastructure and governance upgrades under Tana Africa and Saham Group. These changes aligned with ADvTECH’s strategic ambitions to expand into East Africa and further its presence in high-growth educational markets.
- Initial Investment: In 2018, Tana Africa Capital and Saham Group acquired an 85% stake in FIS to enhance its infrastructure, governance, and educational offerings. The collaboration with the founders significantly elevated the school’s standing in the Ethiopian private education market.
- Value Creation: Tana Africa Capital and Saham Group were critical in transforming Flipper International School (FIS) during their ownership. Their 2018 investment enabled substantial upgrades to the school’s infrastructure, most notably developing a state-of-the-art campus in Addis Ababa’s Summit area. This enhanced the school's facilities and capacity to accommodate the growing demand for quality private education, doubling its enrollment from approximately 1,500 students in 2018 to around 3,000 by 2024.
Operational enhancements were equally transformative. Tana and Saham prioritised governance reforms, technology integration, and academic program development, all of which elevated FIS’s overall standards. These efforts culminated in a remarkable 99% pass rate across all subjects, cementing FIS’s reputation as one of Addis Ababa’s leading private education providers. Such outcomes not only strengthened the school’s market position but also heightened its appeal to strategic buyers like ADvTECH Group.
The alignment of Tana and Saham’s strategic investments with Ethiopia’s growing youth demographic and urbanisation trends positioned FIS for long-term success while generating significant returns for the investors. Their experience with prior educational investments, such as the successful sale of the International Education Group (IEG) sale to Globeducate in 2023, further informed the value-creation strategy at FIS. - Exit assessment: Tana Africa Capital and Saham Group’s exit underscores the importance of aligning investments with favorable market trends and preparing assets to attract strategic buyers. While the founders' departure introduces potential concerns about continuity, ADvTECH’s demonstrated expertise in integrating new schools into its portfolio mitigates this risk. Ethiopia’s youthful demographic and Addis Ababa’s rapid urban growth created a strong demand for private education, while Tana and Saham’s investments in infrastructure and operational improvements enhanced FIS’s market appeal. The investors achieved a competitive exit by positioning the school to attract a strategic buyer like ADvTECH Group. This exit follows Tana Africa Capital's sale of International Education Group (IEG) to Globeducate in 2023, showcasing Tana’s consistency in positioning educational assets for acquisition. For ADvTECH, the acquisition aligns with its pan-African expansion strategy, strengthening its footprint in East Africa. The company’s robust 2023 financial performance—$88.9 million (R1.6 billion) in net profits and $52.2 million (R940 million) in free cash flows—places the acquisition cost at just 8.4% of net profits and 14.4% of free cash flows. Additionally, with $238.9 million (R4.3 billion) in retained earnings, ADvTECH is well-positioned to fund this acquisition without straining its financial reserves or compromising ongoing operations.
About the Fund Manager
Tana Africa Capital, established in 2011 as a joint venture between the Oppenheimer family and Temasek Holdings, is an evergreen investment company focusing exclusively on the African continent. The firm manages two primary funds: Tana Africa Capital Fund I, a 2011 vintage private equity growth expansion fund targeting consumer products and services sectors, and Tana Africa Capital Fund II, a 2017 vintage private equity growth expansion fund focusing on agriculture, educational and training services, food products, healthcare, and retail sectors. Collectively, these funds have assets under management (AUM) totaling approximately $600 million. Tana operates from offices in Johannesburg, South Africa, and Abidjan, Ivory Coast, enabling effective management and support of its diverse portfolio across the continent.
Saham Group, established in 1995 by Moulay Hafid Elalamy, is a private investment company headquartered in Casablanca, Morocco, with additional offices in Dubai and Luxembourg. Initially focused on the insurance sector, Saham expanded its operations across Africa, becoming a leader in the industry. In 2018, the group divested its insurance business to reposition itself as an international player in various sectors, including customer experience services/BPO, real estate, education, and agriculture. Saham's diversified portfolio reflects its commitment to creating value and supporting companies in the long term, with a strong emphasis on sectors that have significant social impact.
