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Many commentators have touted Africa as the future breadbasket of the world, which is plausible given the continent’s large areas of open arable land. Investors, too, are seeing the promise in the agriculture sector. Africa Private Equity News, an industry information service, reported a significant number of agribusiness and food-related investments throughout 2018, and the month of October was no different. Some of the most notable deals that took place are highlighted below.
South Africa’s Public Investment Corporation (PIC) – which manages more than R2tn (US$143bn) – together with empowerment group Pelo Agricultural Ventures announced the successful conclusion of the acquisition of a majority shareholding in Karan Beef for a maximum consideration of up to R5.2bn ($372m). Karan Beef operates the largest cattle feedlot and abattoir on the continent.
Furthermore, the private equity division of Imara Holdings Limited invested in a Zambia-based blueberry producer. Over the past 12 months – on behalf of a European family office client – Imara sourced, structured and invested about $4.5m into Zambezi Berry Company (ZBC), which plans to expand up to 500 hectares and become one of the largest stand-alone blueberry orchards in Southern Africa.
In Uganda, the Yield Uganda Investment Fund committed Ush5.1bn ($1.37m) to Central Coffee Farmers Association Ltd (CECOFA), a farmer-owned primary coffee processor located in the capital Kampala. The fund is managed by Pearl Capital Partners (PCP) and was set up with financing from the International Fund for Agricultural Development (IFAD) and quasi-governmental agency National Social Security Fund Uganda (NSSF). According to Yield, it is on schedule to close a further two agribusiness investments in the remainder of the year.
Moreover, Novastar Ventures, the Nairobi-based venture capital firm, announced an investment into Perennial Foods Group, trading globally as GreenPath Food, a speciality food company that sources produce from smallholder families based in Butajira, Ethiopia. Novastar – joined by Oxfam Great Britain’s impact investment arm, the Enterprise Development Programme (EDP) – is the lead investor in GreenPath’s $1m series-A raise. This investment follows a 2016-17 seed round of an undisclosed amount led by EWB Ventures.
And in West Africa, The Moringa Fund, which targets agroforestry projects located in Latin America and sub-Saharan Africa, last month made its first investment in Ghana – extending some $5m to B-Bovid Ltd, a palm oil cultivation and processing enterprise.
In terms of fundraising, Phatisa, the African private equity fund manager, announced the $121.5m first close of the Phatisa Food Fund 2 (PFF 2), the successor fund to its African Agriculture Fund (AAF). Phatisa expects a final close target of $300m by mid-2019. Together with TechnoServe, Phatisa aims to raise a second technical assistance facility (TAF) to work alongside PFF 2.