ECP invests $47m in personal hygiene company

Emerging Capital Partners has invested $47.3 million for a 49 percent stake in Societe d'Articles Hygieniques (SAH), a Tunisian personal hygiene company. The firm has also acquired options to buy a majority stake.

During the past five years, SAH's revenue grew by more than 30 percent a year, and the company has more than doubled its return on equity.

The company sells baby care, feminine care, incontinence care, and other paper products under the “Lilas” brand. It intends to expand its product range in Tunisia, grow its market share in Algeria and Libya, and accelerate its development in Mauritania and sub-Saharan Africa.

Hurley Doddy, chief operating officer of Emerging Capital Partners, said “The company has a strong market share in its core products and good room to grow in Africa.”

Tom Gibian, chief executive of Emerging Capital Partners, said the funding round was driven by the company’s growth plans in Eastern Algeria and Libya. “These are two countries which don’t have a manufacturer in the country, providing an advantage against competitors.” He said the company would be able to circumvent entry tariffs by investing directly from within the country.

The company’s co-founder and chief executive is a woman, Jalila Mezni, which is relatively unusual for the region, Doddy said. The company’s export business has grown to more than 40 percent of overall sales. 

The investment was made by two ECP funds, its second Africa fund, established in December 2005, and which completed fundraising on $523 million last year, and its Middle East and North Africa growth fund, established in September 2007.

The firm is confident it can build on its investments in Africa and its track record. “Many of the places in Africa are now aware of the role private equity can play. There is more interest in ECP and more limited partners are talking about wanting to figure out Africa. There’s an increasing role for Africa as part of their private equity exposure plans,” Gibian said.