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Carlyle seals maiden deal in Africa

14 Nov 2012

Carlyle has partnered with the private equity arm of Standard Chartered and an infrastructure fund managed by South Africa’s Remgro to buy a minority stake in Export Trading Group (ETG), marking the Nasdaq-listed buyout giant’s first deal in Africa.

The $210m investment represents Carlyle’s maiden deal through its Sub Saharan Africa Fund, a $500m vehicle that will invest in a mix of buyout and growth capital deals in 15 countries in the region, and the first deal for the Pembani Remgro Infrastructure Fund.

Standard Chartered’s Africa Private Equity division (SCPE), the first private equity investor in ETG, is increasing its investment from January 2012 and ETG’s founders have also subscribed for additional equity, the firms said in a statement released today.

“This is a remarkable opportunity to invest in a business with a proven model that is highly scalable, has delivered impressive financial performance and has tremendous development impact on Africa and its economies,” Marlon Chigwende, managing director and co-head of the Carlyle Sub-Saharan Africa Fund, said in the statement.

ETG was founded in 1967 and owns and manages a vertically-integrated agriculture supply chain with operations in procurement, processing, warehousing, transportation, distribution and merchandising.

The company, which has over 7,000 employees in 30 African countries and operates 26 processing plants and 600 warehouses, connects African smallholder farmers to consumers around the world by procuring, processing and distributing agricultural commodities including maize, pulses, wheat, rice, cashew nuts, soya, fertilizer, sugar, coffee and tea.

In the fiscal year ended March 31 2012, ETG procured and distributed nearly 1.4 million metric tons of 25 different commodities.

The deal highlights private equity firms’ recent efforts to expand into Africa in a bid to achieve higher returns outside of stagnant western economies.

KKR recently hired Kayode Akinola away from his role as a partner at Africa-focused private equity firm Helios to source the global buyout giant’s first deals in the region, two people familiar with the matter told AltAssets last month.

The firm is said to be planning to finance deals in Africa through its existing investment funds, and has no immediate plans to raise a fund focused exclusively on the region.

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