Africa Capital Alliance’s (ACA) flagship private equity fund, Capital Alliance Private Equity (CAPE) IV, has completed a full exit from Aradel Holdings Plc. This concludes nearly a decade-long investment in one of Nigeria’s most prominent indigenous upstream oil companies.
The divestment delivered a 3.4x return in dollar terms, equivalent to 17.1x in naira, underscoring the scale of value creation achieved during the holding period. ACA sold its 15.93 percent stake, representing 691.96 million shares, for N387.2 billion at a market price of N559.5 per share on September 25. The transaction marks the end of a long-standing partnership between the private equity firm and Aradel. It also cements the deal as one of the largest energy exits on the Nigerian Exchange (NGX).
A significant portion of the shares was acquired by Petrolin Ocean, which has now emerged as the single largest shareholder in Aradel. Petrolin, which previously held an 8.11 percent interest, purchased an additional 173.79 million shares valued at N96.4 billion. This acquisition boosted its stake to 12.11 percent, giving the Geneva-based company a stronger influence over Aradel’s strategic direction.
A standout exit in the energy sector
ACA’s exit from Aradel caps a journey that began in 2016, when the private equity firm provided Niger Delta Exploration & Production Plc (as Aradel was then known) with an $80 million loan facility at six percent per annum. Two years later, the facility was converted into equity, giving CAPE IV a 16.5 percent holding. At the time, the stake was valued at N23.8 billion, but over the years it appreciated significantly as Aradel consolidated its position in Nigeria’s upstream sector and ultimately listed on the NGX in October 2024.
Shortly after the listing, ACA trimmed its stake by 0.57 percent in a N19.8 billion transaction designed to boost market liquidity, reducing its shareholding to 15.93 percent. With the latest divestment, the fund has now fully exited its position, realising N406.95 billion ($272 million) in capital appreciation proceeds.
When dividends of N31.2 billion received between 2018 and 2024 are included, ACA’s total take from the Aradel investment rises further. The combined payout is estimated at N438.2 billion, which translates to approximately $299.7 million. In dollar terms, the dividend alone amounted to $27.6 million, pushing ACA’s overall return to 3.75x after factoring in distributions.
For Petrolin, a long-standing partner in Aradel’s journey and a member of the Renaissance Africa Energy consortium, the increased stake reinforces its commitment to the company’s next growth phase. Petrolin has been integral to Aradel’s evolution, from a pioneer in Nigeria’s marginal fields program to a fully integrated indigenous energy player with a presence across exploration, production, and refining.
The deal underscores the depth of value creation possible in Nigeria’s upstream sector, while also highlighting shifting shareholder dynamics that could shape Aradel’s future strategy and growth trajectory.
Beyond Aradel: ACA’s track record
Africa Capital Alliance, which has raised about $1.2 billion since its establishment in 1998, has consistently delivered some of the most successful private equity investments in Nigeria. One of its most celebrated deals was its early backing of MTN Nigeria, where ACA invested through its CAPE I to III funds. At the time of ACA’s entry, MTN Nigeria was valued at $400 million. By the time CAPE I exited, the company’s valuation had soared to $13 billion, representing an almost 33x return.
The firm doubled down on the MTN opportunity in 2007 through CAPE II and again in 2010 with CAPE III, although the global financial crisis led to temporary discounts on its shareholding.
In addition, ACA was an early backer of ABC Transport through its CAPE I fund. The firm invested $3.5 million in 2003, and by the time it exited in 2018, the investment had grown to $51 million.
ACA also entered Cornerstone Insurance in 2007 and 2012 through CAPE II and CAPE III, respectively. Today, it holds a controlling 79 percent stake in the insurer through its special purpose acquisition vehicles, Banc-Assure Limited and Capassure Limited. At the current share price of N6.33, that stake is valued at approximately $61 million. This underscores ACA’s ability to identify and scale opportunities across varying sectors of Nigeria’s economy.
With its Aradel exit, ACA has once again demonstrated its ability to create and realise significant value in frontier markets. This has reinforced its status as one of Africa’s most successful private equity firms.
