ECP nets 2x return on agribusiness exit

The pan-African investor has sold sugar, flour and animal feed producer SOMDIAA to its majority shareholders for $26m as Africa Fund I continues to divest.

Africa-focused private equity firm Emerging Capital Partners has exited its 2003 investment in SOMDIAA in a sale to the company’s majority shareholders for roughly $26 million. The exit represents a return of two times ECP’s original investment.

The Central African producer of sugar, flour and animal feed currently produces 80 percent of Central Africa’s consumer and industrial sugar. The company has also more than doubled flour production since ECP’s investment.

African agricultural commodity producers are able to produce some of the world’s lowest cost goods due to plentiful land resources and labor, ECP chief executive Tom Gibian said in a statement.

ECP invested in SOMADIAA from its AIG African Infrastructure Fund (Africa Fund I), which targeted investments in telecom, natural resources, agribusiness, transportation, power and water. The fund closed on $407 million in 2000 and is currently divesting.

Africa Fund I holds one remaining investment in the agribusiness and related sectors in Tunisian dairy product processor Agromed. The fund has exited investments in Ghana- and Cote d’Ivoire-based rubber producer Société Internationale de Plantations d'Hévéas in July 2007 and Moroccan fertilizer distributer Charaf Corporation in May 2008.

ECP’s most recent fund, EMP Africa Fund II, held its final close on $523 million in May 2007 and the firm is currently raising a $1 billion pan-African vehicle, according to a source familiar with the fund.