Old Mutual Private Equity (OMPE) has acquired Honoris United Universities, a major private education platform across Africa.
OMPE bought a majority shareholding in Honoris from Actis Investments in early September as part of its sixth fund.
OMPE manages billions in assets under management and raises billions in capital from institutional investors to buy unlisted companies.
Honoris is the largest pan-African private higher education network that operates in South Africa, Tunisia, Nigeria, Mauritius and Morocco.
The company owns Mancosa, Regent Business School, Red & Yellow, Fedisa and the Animation School in South Africa.
The company currently has over 100,000 students across 26 cities.
The network encompasses 16 institutions, including multidisciplinary universities, specialised schools, and technical and vocational institutes offering in-person and online learning..
Speaking with BusinessTech, Chumani Kula, Co-Head, Old Mutual Private Equity, said the company invested in Honoris for several reasons.
Kula said the Higher Education Institution operates in a tailwind sector with strong growth potential.
On top of this, education is a very defensive sector, with limited downside potential.
He added that acquiring Honoris aligns with OMPE’s desire for a substantial impact as part of its ESG goals.
OMPE also has a mandate to invest in the rest of Africa. Kula said that instead of investing directly into Africa, it backs “world-class” management teams to expand across the continent.
Under OMPE’s ownership, the business will be mainly black owned, emphasising the company’s focus on inclusive economic growth.
The deal forms part of the continued investment momentum through its sixth fund, following the acquisition of Much Asphalt from JSE-listed AECI Limited earlier this year.
Unlike public equity, which offers high liquidity and longer capital requirements, private equity investors will raise capital for large purchases with a roughly two-year timeline to find investments.
For institutional investors, private equity offers good diversification benefits and access to high returns, with OMPE delivering over 20% returns.
Sales incoming
While OMPE is acquiring businesses via its latest fund, businesses from prior funds are now “exit-ready” and will be sold soon.
Per the investment cycle in private equity, exits are essential in delivering returns to shareholders.
This was recently the case after OMPE sold the medical device company Medhold to its competitor, Sanlam’s private equity business.
OMPE has helped increase Medhold’s earnings by nearly three times since its acquisition in 2018. In a similar situation to Honoris, Kula noted that Medhold operated in a defensive sector in healthcare.
OMPE backed Medhold as the company wanted to return to the healthcare sector after selling its stake in Life Healthcare.
On top of this, OMPE sold Sportsman’s Warehouse owner Holdsport to the UK Sport Frasers Group in late 2024.
The sales don’t stop there, with Kula telling BusinessTech that several businesses are now “exit-ready.”
This includes broadcasting giant Primedia, which owns the 702, 94.7 and several other prominent radio stations. It also operates in outdoor advertising and productions.
The group is also looking to sell its stake in 10X Investments, an investment company that offers unit trusts, retirement annuities and other deals.
It is also looking to sell food producer in2Food, which supplies products to Woolworths, Marks & Spencer, Waitrose and local quick service restaurants.
