The Abraaj Group has sold its stake in UAP Holdings Limited to Old Mutual plc. No financial terms were disclosed. UAP is a pan-African insurance holding company with subsidiaries in Kenya, Uganda, Tanzania, Rwanda and South Sudan. It is also an insurance brokerage arm in the Democratic Republic of Congo.
Nairobi, Kenya, 6 July 2015: The Abraaj Group (“Abraaj” or the “Group”), a leading investor operating in global growth markets, today announced the completion of the full exit of its investment, through one of its Funds, in UAP Holdings Limited (“UAP” or “Company”), a pan-African insurance holding company with subsidiaries in Kenya, Uganda, Tanzania, Rwanda and South Sudan, as well as an insurance brokerage arm in the Democratic Republic of Congo. UAP’s services include life insurance, general insurance, health insurance, premium financing services and investment management services.
UAP has been operating in Sub-Saharan Africa since 1977 and its general insurance subsidiaries hold dominant market positions in its main markets. The respective general insurance subsidiaries are currently the fourth largest insurance company in Kenya, third largest in Uganda, fifth largest in Tanzania and the largest in South Sudan. UAP’s life insurance subsidiaries have exhibited sustained growth and continue to improve their market rankings.
Under the terms of the agreement, Abraaj sold its 13.6% stake in the Company, which is traded on Nairobi’s over the counter (OTC) market, to Old Mutual plc, a London-listed international investment, savings, insurance and banking group. In March 2012, Abraaj invested, through one of its Funds, in UAP alongside Africinvest and Swedfund, using a convertible debt instrument. Simultaneously with a limited public offer conducted in November 2012, Abraaj converted its instrument into equity shares in the Company.
Abraaj worked closely with UAP’s board and management team to expand the Company’s regional footprint. Over the course of Abraaj’s investment, the Company’s gross written premium and book value increased at compound annual growth rates (CAGRs) of 25.5% and 18.8%, respectively. UAP also expanded organically into Rwanda and via an acquisition into Tanzania. In addition, UAP grew its investment portfolio, completing an office park in Uganda and a residential building in South Sudan. Construction of a landmark 31-story building in Nairobi is at an advanced stage, as is development of an office building in South Sudan.
As part of Abraaj’s commitment to integrating environmental, social and governance considerations into its partner companies, the Group worked closely with the Company’s board and management to strengthen UAP’s governance, including developing an improved reporting platform and business intelligence tools to enhance data visibility.
Commenting on the announcement, Davinder Sikand, Partner, The Abraaj Group, said: “We invested in UAP based on the Company’s strong brand and well established business lines. With a surge in demand driven by the rapid expansion of a young, urban middle class across Sub-Saharan Africa, UAP has developed in key African markets, and is well positioned to lead the insurance sector in the region. The team has a clear vision for the Company’s further establishment as a leading pan-African insurance firm, and we look forward to seeing its continued growth.”
Peter Njoka, Managing Director at The Abraaj Group, commented: “UAP has been a strong investment for Abraaj and is well positioned to grow its market-leading position across the region. Our experience in UAP demonstrates Abraaj’s depth of knowledge in the financial services industry, and continues to validate the Group’s experience in growing successful businesses in growth markets.”
Dr Joseph B. Wanjui, Chairman, UAP-Old Mutual Group, concluded: “Abraaj played an important role in developing UAP’s business, enhancing corporate governance and positioning the Company for further growth. Our partnership created many opportunities for UAP and we take this opportunity to thank Abraaj for their support.”
Abraaj has helped pioneer the growth and development of the private equity industry in Africa with more than a decade of investing experience and deploying c.US$ 3 billion across the continent. In East Africa alone, Abraaj has over 19 investments, with an active portfolio in Kenya, including leading dairy company Brookside Dairy Limited and cement company Athi River Mining Limited.
About THE ABRAAJ GROUP
The Abraaj Group (“Abraaj” or the “Group”) is a leading private equity investor, purpose-built for operating in the growth markets of Africa, Asia, Latin America, the Middle East, and Turkey.
Employing over 300 people, Abraaj has over 25 offices spread across five regions with hubs in Dubai, Istanbul, Mexico City, Nairobi and Singapore. The Group currently manages c. US$ 9 billion across regional, sector and country-specific Funds.
Abraaj has realized c. US$ 5.1 billion from over 70 full and partial exits, and Funds managed by the Group have made over 140 investments across 10 sectors including consumer, energy, financials, healthcare and utilities. The Group is committed to the highest environmental, stakeholder engagement and corporate governance standards and is a signatory to the United Nations-backed Principles for Responsible Investment and the United Nations Global Compact. Abraaj’s founder, Arif Naqvi, was appointed to the United Nations Global Compact Board by UN Secretary-General Ban Ki-moon in 2012 and to the Interpol Foundation Board in 2014.