Java House, easterly Africa’s largest sequence of coffee shops, is changing hands nonetheless again.
This time, a expansion markets account Abraaj Group is shopping a association from a Washington DC-based Emerging Capital Partners (ECP) for an undisclosed amount. In February, US private equity firms—TPG and Carlyle—were among investors who bid as many as $100 million for a coffee emporium chain.
Abraaj says it’s betting on a continent’s expanding center class, postulated race growth, and augmenting urbanization to enhance a east, west, and north Africa, and by other buyouts.
After decades as a home of some of a world’s vital coffee exporters, coffee consumption is on a arise opposite a continent. Traditionally, Ethiopia was one of a usually African countries with a coffee-drinking tradition. But now there is a flourishing coffee culture among a center category and well-traveled of other countries. Starbucks launched a first underling Saharan Africa store in Johannesburg final year.
Java House has available quick expansion given it was initial non-stop in 1999 by dual Americans, Kevin Ashley and John Wagner. In 2012, ECP bought a 90% seductiveness in a association from a founders—effectively flourishing a association from 13 outlets in Nairobi to some-more than 60 stores opposite 10 cities in Kenya, Rwanda, and Uganda. Java now employs some-more than 2,000 people and serves ceiling of 320,000 diners each month. The organisation also launched Planet Yogurt, a region’s initial self-service solidified yogurt chain, and a pizzeria outlet, 360 Degrees.
The merger of Java House Group will be seen as a bellwether to private equity’s seductiveness in markets opposite Africa. It’s also a latest instance of a arise in private equity exits in Africa to other private equity or financial buyers. Last year, private equity exits strike a record high of 48 deals with 17 of those being financial sale exits. That was adult from a prior high of 7 in 2015, according to trade physique AVCA. The illiquidity of many African batch exchanges means they are incompetent to support many initial open offerings and there are also fewer vital buyers. It means private equity is mostly a usually option.
*Correction: A prior chronicle of this story had used trade exit numbers instead of financial sale numbers.
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