PE firm Helios exits GBfoods’ African FMCG arm

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Helios Investment Partners, which has set its sight on a record corpus for its new Africa sector-agnostic private equity fund, said Tuesday it has completed the sale of its 49% stake in GBfoods Africa to its partner and co-shareholder, The GBfoods SA.

The PE firm didn’t disclose the deal value but said the successful execution of its value-creation strategy resulted in strong financial, social and environmental performance.

During Helios’ ownership, annual operating profit growth of GBfoods Africa was consistently in the mid-teens (about 15%), driven by both revenue growth and margin expansion, the PE firm said.

Established in 2017, GBfoods Africa was a joint venture created by Helios and European food group GBfoods through the combination of the latter’s existing bouillon cubes business in Africa and the acquisition of brands Gino, Pomo, Jago and Bama.

The combined platform generates 70% of gross profit from core brands and has an established presence in over 30 African markets.

“Over the course of its four-and-a-half-year investment, Helios achieved its value creation objectives which were focused on four pillars: integration of the various business units under one Africa-oriented organisation; localisation of production, including large-scale farming and industrial processing; product innovation; and investments into route-to-market,” it said.

The local production initiatives had a particularly significant impact with the investments in West Africa.

To date, the tomato farming and production project in Nigeria has created over 1,000 farming jobs, grew employment of women into new harvesting roles by 80%, and increased farmer output by up to 10 times their prior crop yields.

Nimit Shah, partner at Helios, said: “Our successful investment underscores the strength of our strategy in the consumer non-discretionary sector, focussing on resilient businesses that offer low-cost products with mass market appeal, and our capability to create value for all stakeholders through establishing high ESG standards and achieving growth with positive impact.”

The PE firm had invested in GBfoods Africa from its third fund that had a committed corpus of $1.1 billion and is a 2014 vintage vehicle.

In May 2017, it had partnered with GBfoods to capitalize GBfoods Africa Holdco, creating one of Africa’s largest fast-moving consumer goods businesses. The firm owns brands such as Jumbo (bouillon), Gino and Pomo (tomato paste), and Jago (milk powder and mayonnaise), as well as Bama’s (mayonnaise) distribution rights for Africa.

Source: Capital Quest

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