The Abraaj Group said Monday that it acquired a 49 percent stake in JM Holding, which hold a majority of société d’Articles Hygiéniques or SAH. Financial terms weren’t announced. Tunis, Tunisia-based SAH produces disposable household and personal care products for babies, women and adults.
Tunis, Tunisia, 18 January 2016: The Abraaj Group (‘Abraaj’ or the ‘Group’), a leading investor operating in global growth markets, today announced the acquisition, through its second generation North Africa Fund (‘ANAF II’), of a stake in société d’Articles Hygiéniques (‘SAH’ or the ‘Company’), a leading producer of disposable household and personal care products for babies, women and adults in Tunisia. Abraaj acquired a 49% stake in JM Holding, the company that holds a majority share in SAH. SAH is listed on the Tunisian Stock Exchange.
Founded in 1994 by Mr. Mounir El Jaiez and Ms. Jalila Mezni, SAH is today a household name for quality and affordable personal care products in Tunisia and other North African markets. The Company produces baby and adult diapers, feminine sanitary pads and household products such as paper towels, tissues and toilet paper through six production plants including a cellulose wadding plant. In Tunisia, SAH is the biggest player in the baby diapers segment with a market share of c. 60%, and currently exports to 18 countries across Africa.
Abraaj and SAH are partnering to consolidate the Company’s market position and expand its footprint across Sub-Saharan Africa by enhancing its distribution models, improving production efficiency and focusing on product innovation. With Abraaj’s support, the Company plans to build manufacturing plants in Western Africa to facilitate its growth. From a health, environmental and governance perspective, Abraaj will work with SAH to enhance safety standards and environmental performance in the production plants, and further institutionalize the business by enhancing its management processes and reporting mechanisms.
Population growth has driven the demand for affordable, high quality household and personal care products in Africa and this upward trend is further boosted by higher disposable incomes and evolving consumer habits. The target markets for SAH’s expansion include the Central African Economic and Monetary Community (CEMAC) and the West African Economic and Monetary Union (UEMOA), representing a total addressable market of US$ 480 million with a projected average annual growth of 10% and 11% respectively.
Commenting on the transaction, Ahmed Badreldin, Partner and Regional Head for Middle East and North Africa at The Abraaj Group, said: “With more than a decade of investing in Africa, Abraaj has substantial experience growing businesses across the continent, with a particularly strong track record in consumer businesses. Fuelled by rising disposable income and market necessity, the opportunity for household and personal care products in Africa is poised to grow even further. We believe SAH is in an excellent position to benefit from this opportunity through strategic expansion and product diversification.”
Adel Goucha, Managing Director at The Abraaj Group, added: “We are impressed with SAH’s management team, led by Ms. Jalila Mezni, and the Company’s strong track record since inception. SAH possesses a strong brand in Tunisia, and together, we intend to continue building the Lilas brand across Africa. We look forward to leveraging our global network and experience in the consumer sector to support SAH in actively driving its growth agenda from both a strategic and operational capacity.”
Jalila Mezni, Founder and CEO of SAH, added: “This is an opportune time for us to further expand across Africa. We will continue to augment our management team and enhance our distribution network to support our expansion, in addition to focusing on product innovation to develop high quality household and personal care products for babies, women and adults. We are confident that Abraaj is the ideal partner to help us achieve our goals.”
Since 2006, Abraaj has helped pioneer the development of the private equity industry in the Middle East and North Africa. Recent investments include leading app-based car service Careem, Moroccan oncology and imaging diagnostic centers Al Kindy and Clinique Menara, and Egyptian education provider Tiba Group. Abraaj has four investments in Tunisia including the North Africa Hospital Holdings Group, a healthcare platform to enhance the quality and accessibility of healthcare in Egypt and Tunisia, and L’Accumulateur Tunisien ASSAD, a leading battery manufacturer.