Catalyst Principal Partners, a private equity firm in Kenya, has purchased a majority stake in EFFCO. No financial terms were disclosed. Based in Tanzania, EFFCO is a heavy equipment rental and logistics company.
Nairobi- Kenya-based private equity firm Catalyst Principal Partners has announced acquisition of majority stake in Tanzania of a heavy equipment rental and logistics firm, EFFCO. Catalyst Principal Partners invests amounts of between US$5million – US$20million into deals with an average investment period of between 4 to 6 years.
The management-backed buyout is consistent with Catalyst’s strategy of investing in emerging companies within high-growth sectors across eastern Africa. Catalyst has backed a dynamic management team with ambitious growth aspirations, with local senior managers acquiring a significant equity interest alongside Catalyst and being empowered to drive an accelerated growth strategy.
“We see great growth potential in EFFCO,” Catalyst Managing Director Rajal Upadhyaya said. “We are impressed with the range and sophistication of services they offer blue chip companies across industrial, construction, mining and oil and gas sectors – all high-growth areas with significant demand and potential for the specialized best-in-class services and health and safety standards that EFFCO can provide.”“This opens new frontiers for the company,” EFFCO Group CEO George Miseda remarked. “Catalyst’s ability to add value, its active investment approach and extensive networks will allow us to rapidly scale up our operations and expand the business to take a leading positioning in Tanzania and across the rest of the east African region”.
Acquisition of EFFCO is the fourth deal Catalyst Principal Partners has announced in the region since it successfully raised a US$125million (KSh10.8 billion) private equity fund, focused on investing in eastern Africa. The private equity firm has also invested in ChemiCotex, a leading personal and oral care manufacturer, and Chai Bora, the largest tea packaging firm, both based in Tanzania. The firm has also invested in Ethiopia’s Yes Brands, the leading mineral water bottling company in Ethiopia.
EFFCO was established in 2010 as a plant hire company whose services comprise of heavy lifting and haulage, logistics services and civil works in mining and industrial businesses operating in Tanzania.
Catalyst Principal Partners LLC (www.catalystprincipal.com) manages Catalyst Fund I LLC, a US$125m private equity fund that invests in high growth mid-sized companies across Eastern Africa, including Tanzania, Ethiopia, Kenya, Uganda, Rwanda, Zambia and the Democratic Republic of Congo. The Fund’s sector focus includes consumer goods and retail, financial and business services, industrials, manufacturing and value-add processing, technology and telecommunications, with the Fund making strategic minority and controlling equity investments ranging from between US$5m and $20m.