KPMG Professional Services, one of the biggest professional services firms in Nigeria recently presented its Second Edition of the KPMG “Doing Deals” report to the public, with a press briefing at its Head office in Victoria Island, Lagos.
The report titled: ‘Doing Deals in Nigeria 2019 – Key Insights from Dealmakers’ is the result of a survey of 50 senior business executives working in global companies which have a presence in Nigeria and have completed at least one acquisition in Nigeria in the last four years. 70% of the respondents are strategic investors while 30% are financial investors with 66% resident abroad and 34% being indigenous respondents.
Findings from the survey indicate that Nigeria remains an attractive destination for investors seeking sustainable growth opportunities within the continent. Consumer Goods, Financial Services, Energy, Mining and Utilities, Telecommunication, Media & Technology and Business services sectors accounted for about 88% of investments in the country in the last two years.
The survey attempts to take the pulse of buyers in their approach to this sometimes complex but rewarding market. According to Dapo Okubadejo, Partner and Head, Deal Advisory and Private Equity, KPMG in Nigeria, the focus for the Second Edition of the report is “on investors who not only provide capital but have a presence in Nigeria. These respondents are able to provide a lot more feedback in terms of their local experiences, thereby giving a more robust feedback than the First Edition.”
The report also provides potential investors with insights into how best to do deals in Nigeria, leveraging the experiences of people who have been through the process and completed transactions.
Ijeoma Emezie-Ezigbo, Partner, Deal Advisory, KPMG in Nigeria, presented a summary of the survey findings focused on three parts; the case for Nigeria, deal dynamics and key deal drivers. Mrs Emezie-Ezigbo noted that “the survey reiterates that Nigeria is still one of the most compelling M&A markets in Africa”.
Based on the findings, Nigeria will continue to be open for business and attractive to investors in the long term, with investors expecting Consumer Goods, Financial Services, and Pharma, Medical and Biotech to be the top three attractive sectors over the next four years. This is largely similar to the First Edition, however, Healthcare comprising Pharma, Medical and Biotech improved significantly, from ranking 7th in the last survey, to 3rd sector in terms of attractiveness.
With respect to deal dynamics, the target’s customer base continues to be the most important consideration in target selection for investment. On the other hand, IP/technology and regional distribution channels are also important considerations, based on investors’ response in this Edition.
In view of our recent economic recession, it is not surprising that economic volatility ranked no. 1 as the most important challenge to investing in Nigeria, unlike last year, where the survey found the lack of physical infrastructure to be the single most important challenge to investing in Nigeria.
As investors navigate through the challenges of Doing Deals in Nigeria, it is noteworthy that the most important aspect of due diligence they believe they could have done better is ‘to allocate more resources to the transaction evaluation process.’
In conclusion, Mr. Okubadejo remarked that: “our expectation is that policy makers would incorporate the feedback from investors in shaping their policies in order to attract improved levels of foreign direct investment.”
For more information, download and read the full report from the KPMG Nigeria Website via https://home.kpmg/ng/en/home/insights/2019/03/doing-deals-in-nigeria.html
About KPMG Nigeria
KPMG is a professional services firm with deep expertise in the provision of Audit, Tax and Advisory services to clients in various industries and sectors of the economy including the public sector. KPMG is well represented in Nigeria and across the African continent. Our objectives are to provide quality services to multinational, regional and local clients and to enhance the product offering in certain previously under-serviced markets.
For more information, please contact:
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+234 803 5353 099
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+234 909 1752 186
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