Multiples sector focus shows how both the consumer discretionary and consumer staples industries fetch the highest multiples across all sectors. The consumer sector has been identified time and time again as one of the most attractive areas for investment on the continent, due to the favourable demographics and the so-called ‘growing middle class’.

It is clear that there are many transactions taking place in this sector, within consumer discretionary in particular. High growth expectations, fierce competition, or decreased risk perception could be the contributors to these relatively higher multiples.

Another prevalent sector is the industrials sector, which incorporates construction, engineering, transport, logistics, equipment and machinery, among others. These industries are essential to any economy and will benefit greatly from a growing economy, which explains their popularity among African countries.

On the other end, the energy sector attracts far fewer and much larger transactions at a lower cost. The highly regulated nature of this industry could be a factor keeping prices lower, as well as the significant amount of capital required. It is interesting to note however, as has been discussed in previous Bright Africa reports, that the range of multiples across these sectors is small, from 4.66x (energy) to 6.90x (consumer staples).