Duet Group has delivered its second African private equity deal, investing in Ethiopia-based Dashen Brewery.
Vasari, a London-based wealth manager, and TIRET Group, an Ethiopia-based wealth manager have also backed the deal. Although the financial details have not been disclosed, it is understood that the investment consortium may have paid up to $60 million for a 60% stake in the company.
The deal has been structured as a buyout through a new holding company, Duet Beverages Africa, which will be co-managed by Vasari. The wealth manager has come in as an industrial partner, as it has a track record of investing and growing companies across Africa.
The funding will be used to expand the Dashen’s capacity and enhance distribution channels. The company has reportedly been working on plans on build a new facility, Gondar Malt Factory.
The investors were attracted to the deal because of the sector’s strong growth prospects. Ethiopia’s beverages sector has grown by over 25% per annum over the last five years, and is expected to continue to blossom in line with Ethiopia’s gross domestic product. Ethiopia is expected to be Africa’s fastest growing economy over the next five years.
Duet’s belief in the sector is underscored by a number of global financial and strategic buyers last year paying over $400 million for three state-operated breweries.
“We have been very impressed by what has been achieved at Dashen. We believe Duet and Vasari will add tremendous value for the next growth phase of the Company,” said Henry Gabay, Duet’s co-chairman. “We are also proud of having the TIRET Group as a partner, with whom we will evaluate other opportunities in various sectors.”
Headquartered in Gonder, Dashen is a producer and distributor of bottled and draught beer.The company was established in 2000, and was previously owned by the owned by the Amhara National Regional State Rehabilitation and Development Organization. Dashen is estimated to employ at least 500 people.
The deal was led by Saad Aouad, Duet’s chief investment officer for African private equity. He was supported by Demissie A. Demissie, managing director at the investor’s Ethiopian office, and Neil Everitt, managing partner, and director Afsane Jetha, who joined the team from TLG.
TIRET Group was represented on the deal by Bereket Simon, board chairman and Tadesse Kassa. The investors were advised by Norton Rose and PriceWaterhouseCoopers.