DPI acquires a third of B-Tech for USD 35 mn
UK private equity group Development Partners International (DPI) is investing USD 35 mn to acquire 33.3% of B-Tech, Egypt’s largest electronics and home appliances retailer with nearly 70 stores, the Financial Times’ Heba Saleh reports (paywall). DPI, which specialises in investments in Africa, says B-Tech has been growing an annualised rate of 18%. DPI has a “strong belief that B-Tech will grow strongly over the next five years which will more than offset any depreciation of the currency,” DPI’s Sofiane Lahmar said, pointing to “the expansion in housing and the annual increase in the number of marriages” in Egypt. DPI’s investment will come in a capital increase to fund expansions in brick and mortar stores, online, and enhancing infrastructure, the FT said. DPI has more than USD 1 bn in private equity assets under management and says it invests “across the African continent in companies benefiting from the fast-growing emerging middle class.”
In a statement released by EFG Hermes, B-Tech Chairman and CEO Mahmoud Khattab notes that the retailer invested EGP 60 mn to “enhance its operations” last year and says the chain has “grown over the last ten years to become the leading household appliances and consumer electronics retailer in Egypt.” Moustafa El Chiati, Managing Director of EFG Hermes UAE, noted that the injection from DPI will allow B-Tech to implement a “forward-looking growth strategy that will see improvements to the supply chain and IT infrastructure, the opening of new stores and the launch of new products and services.”
EFG Hermes Investment Banking was sole advisor to B-Tech. Zulficar & Partners and White & Case LLP (the latter of which recently inaugurated its Cairo office) were legal advisors.
FX crunch disrupting the M&A market? It’s not all roses, though. Saleh’s piece for the FT quotes Ahmed Ozalp, executive director at Arqaam, which acquired M&A specialist Akanar Partners from Ozalp & Co. earlier this year, as noting that “there is still foreign investor interest but the FX problems have caused a lot of disruption. It has stopped some people from looking at deals in Egypt and it has disrupted certain late-stage deals because there is a differential between the official and the black market rate.” Consumer plays are in favour (including food and beverage and healthcare) alongside power and hydrocarbons.