After an initial slowdown due to the pandemic, M&A activity is on the rise in Nigeria and across Africa, with technology playing an increasingly key role for businesses, investors, and legal advisors, say corporate experts Ayinla and Oyedeji.
“Investors moved focus away from just getting deals done; many decided to adopt a wait and see approach and were more finicky and granular in the due diligence process,” explained Oyedeji, a senior associate at Duale, Ovia & Alex-Adedipe (DOA), a leading Nigerian law firm. “Investors want to know, with all these deals, how the company will be impacted post-pandemic.”
Oyedeji and Ayinla, a partner at DOA, confirmed that the telecoms sector has been one of the winners in the pandemic. Fintech, healthcare, and consumer goods have also flourished.
In a single month in the first quarter of 2021, more was raised by Nigerian tech firms (US$202 million) than in all of 2020 ($170 million). After three African tech startups secured $100 million-plus funding rounds in 2019, and none in 2020, a record 11 nine-figure investments took place last year, many in Nigeria, and more than $4 billion was raised, also a record.
“The pandemic has been one of my busiest times as a lawyer,” Oyedeji commented. “We’ve advised a lot of M&A deals, and it keeps growing.”
Telecoms companies earned huge revenue during the pandemic because of the massive demand for online services to support the work-from-home culture and to access entertainment, noted Ayinla and Oyedeji.
“A lot of investments are going into this space now,” Oyedeji confirmed. “I think as an investor looking for a hedge against future risk, it is safer to make investments in these sectors – consumer goods, financial services, healthcare, and telecommunications.”
The article was originally published in Africa Legal.