Cairo-based Citadel Capital has made its first acquisition in Sudan via its portfolio company Rashidi El-Mizan (REM).
REM, which is part of Citadel’s Egyptian food and agribusiness platform Gozour, has purchased Sudanese food producer Al-Musharraf for $19 million. Al-Musharraf is one of Sudan’s largest producers of biscuits, flour and halawa – a sweet confection otherwise known as halva or helva.
Citadel characterised the Sudanese market as having consumption patterns similar to Egypt’s with a 40-million-strong consumer base. Food products sell at a 30 percent premium compared to the Egyptian market, the firm added in a statement.
Mohamed El-Rashidi, chief executive officer of Gozour foods, described Al-Musharraf as “one of Sudan’s oldest and most recognised brand names for halawa and biscuits.”
“Although Al Musharraf is a distressed investment,” he said, “we feel that we can turn things around with management, restructuring and targeted investments to upgrade production lines and increase capacity.”
Gozour is exploring additional regional expansion in Algeria, Ethiopia, Uganda and Kenya.
Citadel also added a further platform company to its portfolio with the acquisition of two Egyptian firms in the solid waste management business.
The Egyptian Company for Solid Waste Recycling (ECARU) and the Engineering Tasks Group (ENTAG) are managed as one firm and will be grouped under a single holding company to serve as a platform for further investment in the solid waste management sector.
Citadel managing director Marwan Elaraby described the sector as “under-developed” across the region, with a limited number of large companies operating and much of the region’s waste not being properly treated.
In addition to its offices in Cairo and Algiers, Citadel is also looking to establish locations in South Sudan and Ethiopia to access deal flow throughout East Africa.
Earlier this week the firm said it would list 12.5 percent of its shares on the Egyptian Stock Exchange. The main driver behind the listing, it said, is to allow it to raise equity capital easily in the future. It would also create “liquidity for existing financial investors in our firm at a time when that liquidity is becoming of greater importance than ever before”, said chairman and founder of Ahmed Heikal.