Dan Eberhart, CEO of Canary LLC, made his money by acquiring and combining oilfield services companies in the US. His private equity vehicle, Eberhart Capital, is now looking for investment opportunities in Africa. How we made it in Africa asked Eberhart about his plans and what he has learnt about doing business on the continent.
To date Eberhart Capital has primarily invested in US-based companies. What made you decide to turn your attention to Africa?
After attending the trade mission with the US Commerce Secretary last May, my eyes were opened to the tremendous possibilities on the continent. We tend to look for larger types of companies with high barriers of entry, and one example would be heavy machinery. This type of industry is not as prevalent as we feel it could be, leaving ample room for investment and an opportunity to contribute to the continued growth of Africa at large.
In Africa you are focusing on acquisitions in logistics, construction and agribusiness. Why these sectors specifically?
We have experience operating in these sectors and think they will perform well when overlaid with the larger trends of population growth, urbanisation and rising GDP per capita. And in choosing these sectors, we feel they will play a vital role in the future of Africa. Geographically the continent is very large and diverse and made up of many, many nations. The sooner the continent can produce locally what is needed in terms of infrastructure and development, the faster it can bolster its role as one of the biggest and most important markets in the world.
When it comes to making an acquisition, what do you look for in a company? Have you come across African companies that meet your investment criteria?
When looking to acquire a company, we take a variety of factors into consideration. We specialise in growth-driven return strategies and consistently seek out opportunities from an array of markets, industries and stages of development. Alongside all of this, a top priority is a quality company upon which we can promote growth within the company as well as within the industry, whether it be on national or international scale.
Speaking to African companies that meet this criteria, there are several. It is critical we engage with the company at exactly the right time, as each situation is different. Some companies need more investment to succeed than others, and the companies that need more capital to achieve the next step in their business are the types we are looking for.
You have visited the continent a number of times recently. Tell us about some of your own perceptions about the business environment that turned out to be false.
People have in general been very welcoming. We have recently been mapping the logistics space, and if we were to do the same process in America, these people would have never taken the meetings. Though the continent is big, the number of decision-makers is relatively small, which is probably the biggest perception we’ve had that turned out to be false. We assumed, given the size of the continent and wide array of countries, it would be much harder to network. But so far the continent has proved very accessible, and the individuals we have met have been tremendously welcoming and willing to open up their own personal network.