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News > Private Equity > Deals

EXEO Capital in aquaculture deal

Africa Global Funds
Feb. 7, 2018, 9:46 p.m.

Word count: 514

EXEO Capital via its $175m Agri-Vie Fund II has made an inaugural investment into a fast-growing aquaculture company operating on the South and West coasts of South Africa – TerraSan.

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EXEO Capital via its $175m Agri-Vie Fund II has made an inaugural investment into a fast-growing aquaculture company operating on the South and West coasts of South Africa – TerraSan.

Kennett Sinclair, Partner at EXEO Capital – an Africa-focused private equity manager – said that as wild-caught fish numbers decrease due to stricter regulated marine activity, climate effects and trading regulations, aquaculture - the breeding of fish and other aquatic animals under controlled conditions – continues to gain popularity across the world.

Aquaculture has also seen rapid growth in South Africa given the high value export-oriented nature, local government support and expansion opportunities. 

Sinclair said that it is for this reason that their Agri-Vie Fund II – the private equity fund focused on food and agribusiness investments in Sub-Saharan Africa – has concluded an investment into TerraSan. 

“The fundamentals driving the aquaculture industry globally as well as in Sub-Sahara Africa support the strategic rationale for the transaction. In addition, this partnership introduces the potential for expansion and value addition across the TerraSan business to a level not possible before.”

A mature business with good management, a large percentage of black shareholders and very sound corporate governance, TerraSan has the proven ability to be a platform for other acquisitions, Sinclair explained.

Dr Mohammad Karaan, Executive Chairman at TerraSan, said: “TerraSan is pleased to welcome Agri-Vie to its fraternity of shareholders. We look forward to their contributions to our company as we strive to expand our investments.” 

Despite being a long-standing business, Sinclair pointed out that TerraSan exhibits exceptional growth prospects which are in most cases already in the process of being implemented.

“TerraSan’s strategic intent is to grow organically by expanding its abalone and mussel production facilities, improving the quality of the bulk fishmeal produced in order to command a higher price for exports and becoming the processing home for the smaller quota holders in the small pelagic fishing industry.” 

As fishmeal is a major expenditure component for fish producers engaged in aquaculture based predominantly in the northern hemisphere and abalone is a highly sought-after delicacy in Asia, Sinclair said that EXEO Capital finds TerraSan attractive given EXEO’s emphasis on investing in companies focused on exports and import replacement, which most of TerraSan’s activities are focused on.

“Although substitute products such as soya meal, rapeseed oil, and even alternative proteins such as insects have been growing, most aquaculture products require fishmeal and fish oil in their diet, which will likely result in increasing prices of fishmeal and fish oil.”

The Fund’s deployment programme is gaining momentum with this, its first investment, and the investment team is also attending to a range of other imminent opportunities in Sub-Sahara Africa.

About Our Publication

Africa Global Funds (AGF) is a monthly magazine for asset management professionals and institutional investors worldwide interested in the African continent. AGF was created as a relevant and engaging resource that can provide readers with an insight of what is going on in the African asset management space. Drawing on an intense dialogue with a constantly expanding group of key decision-makers in the industry, we cover traditional and alternative asset classes of African asset management. From this dialogue we work hard to produce a compelling blend of hard news, incisive commentary, detailed sector and regional reports, exclusive interviews and proprietary data.

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