Standard Chartered Bank Africa’s Private Equity division has acquired a minority stake in Tanzania-based agribusiness Export Trading Group (ETG) for $74 million.
The deal places a $500 million value on the company. The investment has been made through its holding company ETG Mauritius, which holds a number of agribusinesses across Africa, Asia and the US. ETG Mauritius is wholly owned by ETG Singapore.
“Given that over 60% of the world’s arable land is in Africa, the African agri-sector holds considerable growth potential, ” said Ronald Tamale, director in Standard Chartered’s Africa Private Equity team. “ETG, with its East African origins, is a long-standing client of the Bank.”
ETG will use the funds to further support its expansion plans, both in its current core markets and in new geographical regions. The deal was originated through the private equity team’s parent company Standard Chartered Bank, whose credit arm has previously provided debt to the company.
The bank in 2010 provided a $120 million structured soft commodity syndicated loan to ETG, alongside the International Finance Corporation and OPEC Fund for International Development. The funding was used to fund expansion of ETGs commodity trading activities in Tanzania, Zambia, Kenya, Malawi, Uganda, India and China.
ETG originates, processes and distributes soft commodities primarily in Sub-Saharan Africa, India and China. The company was started as an agricultural marketing company in Kenya in 1967, and later set up its trading headquarters in Dar es Salaam, Tanzania. The company has since grown into an integrated platform of agricultural supply chain companies.
The company is structured along procurement, production, processing and support services divisions, and also has a logistics unit. In addition to selling into the African and Asian markets, ETG also markets its products in the Unites States, the United Kingdom and Switzerland.