Former Actis dealmaker’s Catalyst fund seals second investment


chai bora_sqCatalyst Principal Partners, the East African private equity firm set up by former Actis dealmaker Paul Kavuma, has sealed its second investment by buying a controlling stake in Tanzanian packaged tea company Chai Bora.

The Kenya-based firm, which recently closed its maiden fund 25 per cent above target on $125m, has bought a 95 per cent stake in the packaged tea manufacturing company for an undisclosed sum.

TransCentury, a Kenya-based holding company, sold the business in line with its strategy to focus on investments in power infrastructure, transport infrastructure and engineering.

Chai Bora is based in Mafinga, Iringa and blends, packs and makes various blends of tea for sale. It also owns the African Infusions brand, a herbal tea product.

The company began life in 1994 as a subsidiary of TATEPA, and was fully incorporated in 2006 as an independent firm.

The acquisition of Chai Bora represents Catalyst’s second investment in Tanzania, and is consistent with its focus on consumer goods, financial services, technology and industrials.

The firm’s first deal was in Chemi and Cotex, a Tanzanian consumer goods company that is also backed by Africa-focused Satya Capital and HSBC Principal Investments.

“Chai Bora is a recognised Superbrand in Tanzania where it has established a market share as the leading tea company in the country,” Catalyst managing director Rajal Upadhyaya said in a statement.

“Our aim is to support the continued growth and expansion of the business within Tanzania and across the region, so that consumers can continue to benefit from an increasingly wide variety of affordable high quality Chai Bora products and brands.

“We remain upbeat about the prospects for Eastern Africa. This investment represents a ramping up of Catalyst’s investment activities across the region,” he added.

Kavuma left Actis East Africa to found Catalyst in 2009 and closed Catalyst Fund 1 in November last year, a vehicle that invests in a range of consumer growth-related opportunities in East Africa.

The fund invests amounts of $5m to $20m in companies in the consumer goods, retail, technology, services, manufacturing and engineering sectors in Kenya, Uganda, Tanzania, Ethiopia, Rwanda and the Democratic Republic of Congo.

Investors in the fund include the IFC, European Investment Bank, African Development Bank and the German Investment and Development Corp.

Copyright © 2013 AltAssets