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Carlyle buys $147 million stake in Diamond Bank

Diamond Bank

Carlyle Group, a private-equity firm, has bought a $147 million minority stake in Nigeria’s Diamond Bank PLC, betting that a new mobile banking service will help rapidly boost the lender’s customers and profits.

Diamond Bank has added more than 600,000 mobile banking customers since it started offering its Y’ello bank account via mobile phone operator MTN a few months ago. The bank aims to have five million mobile banking users, doubling its existing customer base, by the end of 2015, Uzoma Dozie, its chief executive, said in an interview.

The purchase of the stake through a rights issue is the fourth investment Washington-based Carlyle has made from a $698 million fund for sub-Saharan Africa, which it completed raising this year. The other investments are in agricultural supply chain company ETG; J&J Africa, a logistics company; and metals trader Traxys SA.

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The world’s biggest private-equity firms are scouring Africa for acquisitions, lured by higher growth rates and new opportunities in infrastructure and providing services to emerging consumer markets. New York-based KKR KKR made its first African acquisition this year, buying into an Ethiopian rose farm. In Nigeria, private-equity firms are considering bids for drinks company Chi, a person familiar with the company said.

“We are very bullish on the continent,” Carlyle managing director Genevieve Sangudi said in an interview. “We are here to stay.”

WSJ