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AGF Magazine - April 2019 issue

  • In a region where only a minority of the population has access to a bank account and SMEs struggle to get financial help from traditional banks, Albert Alsina, CEO and Founder of Mediterrania Capital Partners, explains how the PE industry is becoming a catalyst for the African Fintech ecosystem’s development, enabling large-scale banking and supporting entrepreneurs and SMEs in their expansion plans (pp. 10-12).
  • In this month’s issue of Africa Global Funds, we also caught up with Kenneth Kaniu, Britam Asset Managers CEO, to learn about their anchor investment in Tiserin Capital, and the needs and constraints of institutional investors in Kenya and East Africa (pp. 14-15).
  • On the infrastructure front, we hear from Moritz Breickmann, Investment Director at African Infrastructure Investment Managers (AIIM) who showcases some successful airport redevelopments in Africa. Read on to find why airport infrastructure projects on the continent can provide attractive long term returns to investors (p.17).
  • In this month’s issue we also learn that the FTIF Templeton Africa Fund was merged into the FTIF Templeton Frontier Markets Fund. We speak with Ahmed Awny and David Haglund about the Fund and its African investments (p.16).
  • Finally, Rob Childs, Head of International for Prescient Fund Services shares his views on the global distribution challenges facing African fund managers and why the firm decided to domicile their offshore fund range in Ireland (p. 22).
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News > Private Equity > Deals

Ethos co-invests with EPPF in Gammatek

Africa Global Funds
Oct. 4, 2018, 8:54 p.m.

Word count: 501

Ethos Mid Market Fund I (EMMF I) has announced the closing of a c.60% investment into South African-based consumer technology distributor, Gammatek.  

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Ethos Mid Market Fund I (EMMF I) has announced the closing of a c.60% investment into South African-based consumer technology distributor, Gammatek.  

Edward Pitsi, Managing Partner of Ethos Mid Market Fund I, said: “Gammatek is recognised and valued by its suppliers as a top global distributor and is trusted with their brands. Our investment will enable the business to continue its growth trajectory and facilitate market penetration into the rest of Africa where we see meaningful potential – all  while continuing to offer service excellence to existing and prospective customers.”

The transaction marks the Fund’s seventh investment in 18 months. 
The Ethos-led consortium comprises: EMMF I, with a 51% shareholding, and Eskom Pension & Provident Fund (EPPF), with a 9% stake.  

Gammatek management hold the remainder.
Established in 1998 by Gary Tooch and partner Warren Berman, Gammatek is the mobile device accessory distributor in South Africa, with an estimated 50% share in its chosen markets. 
“Gary, Warren and their team have built an exceptional platform. Together, we plan to optimise and scale the current operations to enhance sales capacity, while accelerating the rollout of newly introduced products into new channels.  We have a shared strategic vision and are excited to be part of Gammatek’s next phase of growth,” added Pitsi.

As an importer, distributor and manufacturer of mobile device accessories and low-technology consumer products, Gammatek represents many leading brands, including: Body Glove, (*)Speck, UAG, Snug, Funko, and Solo.  They supply these products to leading South African clients, including Vodacom, Chatz, Incredible Connections, Core Group’s iStores and Musica.
Gary Tooch, Gammatek CEO, said: “For 20 years, Warren and I have been business partners; we’ve grown Gammatek from an entrepreneurial dream into a commercial reality.  Identifying an aligned strategic investor – who supports our growth vision – is a critical milestone for our business.” 
“Over the past few months, we have been extremely impressed by the investment and commercial acumen of the Ethos Mid Market team.  Over this time, we’ve built a trusted relationship, which I know will be critical to our future success.  We share a growth-mind set, respect for business diligence and ethical standards, plus a passion for relevant African business. I firmly believe we have chosen the best partners for our growth plan.”
Titi Sekhukhune, Ethos Mid Market Principal, concluded: “Gammatek continues the Ethos Mid Market Fund’s stated strategy of investing into businesses where we believe we can accelerate growth.  We are proud to have partnered EPPF in this transaction, which sits squarely within our mid-market investment strategy.
“As the seventh investment in under 18 months, we remain encouraged by the number of quality opportunities we are assessing, together with the momentum of our capital deployment.  We believe this is testament to the Fund’s unique combination of proven institutional investing and value-adding capacity, coupled with sustainable black economic empowerment solutions and transformational impact. ”
The transaction is not subject to any outstanding regulatory approvals or conditions precedent.

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