Private equity firm DOB Equity has bought a stake in Joseph Initiative, a Ugandan grain seller, for an undisclosed amount.
DOB, with offices in Nairobi and Netherlands, said a non-disclosure clause does not allow it to reveal the numbers, but said its typical investment is between $1 million (Sh90 million) and $2 million (Sh180 million) for shareholding of between 25 per cent and 49 per cent.
The investment period is up to 10 years and the capital will be used to increase the company’s grain handling capacity.
“The funding will be used to expand Joseph Initiative’s processing and storage facilities in Western Uganda,” said DOB in a statement.
Other private equity deals in agribusiness this year included Fanisi Capital’s Sh221 million investment in Ngare Narok Meat Industries Ltd announced in August.
Fanisi’s investment acquired a 40.15 per cent stake in the meat processor.
Private equity firms have been investing in agribusiness in the region which the World Bank says is poised for a takeoff due to a growing population, rapid urbanisation and a gradual shift to irrigation.
“If matched with more electricity and irrigation, smart business and trade policies and a dynamic private agribusiness sector that works side by side with government to link farmers with consumers in an increasingly urbanised Africa, the World Bank estimates that agriculture and agribusiness together could command $1 trillion presence in Africa’s regional economy by 2030,” it said.
Both Fanisi and DOB have other agribusiness investments in their portfolio.
Fanisi has invested in ProDev Group, a Rwandese maize-flour miller, while DOB has stakes in Tanzanian dairy Tanga Fresh and Prothem, a Burundi-based tea processor.
The latest deal by DOB is the second this year following its Sh120 million investment in Globology, a firm that operates ferry services in Lake Victoria. Source: Business Daily Africa