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Criterion partially exits Peak

Anna Lyudvig
March 30, 2021, 10:56 a.m.
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Word count: 432

Criterion Africa Partners, a private equity firm investing in the forestry sector in Sub-Saharan Africa, has exited the forestry and saw-milling business of its portfolio company Peak Timbers (Peak) to Shiselweni Forestry Company.

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Criterion Africa Partners, a private equity firm investing in the forestry sector in Sub-Saharan Africa, has exited the forestry and saw-milling business of its portfolio company Peak Timbers (Peak) to Shiselweni Forestry Company.

Shiselweni is a wholly owned subsidiary of TWK Investments, a local strategic buyer that trades on the ZARX stock exchange in South Africa.

Due to the confidentiality agreement with the acquirer, financial details were not disclosed.

George McPherson, Managing Director, Criterion Africa Partners, said: “The fund CAP manages has owned Peak Timbers since 2012 and the team believes a larger strategic player is best suited to capitalize on the quality of the asset that exists today versus what it was in 2012.”

“The proceeds of the transaction will be received by the fund and distributed to limited partners by the end of April 2021,” he told Africa Global Funds.

Peak is an integrated forest products company located in the Kingdom of Eswatini (formerly Swaziland) that includes 20,000 hectares of FSC certified eucalyptus plantations and a sawmill that produces mining timber and lumber.

Peak supplies utility poles, lumber, mining timber, pulpwood, and biomass for African markets. As the plantations mature in the coming years Peak’s sustainable annual timber harvest is expected to increase from its current harvest of 350,000 cubic meters/year to more than 550,000 cubic meters/year.

“The fund is selling most of the Peak assets with the exception of a small portion of the forestry land that is ideally suited for agriculture development. CAP is working with its agriculture partners to develop this land to substantially increase its per hectare value above that of forestry land,” McPherson said.

Since its acquisition of Peak in 2012, the CAP team has catalyzed additional investment of approximately $25m into the rehabilitation and development of the business to enhance productivity and attract interest from prominent strategic players like TWK.

The acquired Peak business will continue to have a significant economic development impact in the north-eastern region of Eswatini where it directly employs approximately 550 people and is a significant source of business for small to medium sized enterprises (SMEs) which provide employment to approximately 1,000 people.

CAP said it is especially pleased with the transaction in that the sale of Peak to TWK will ensure the employees will be retained, its operations will continue to be well-run, and its forest resource will be sustainably managed and in accordance with FSC certification.

Africa Sustainable Forestry Fund (ASFF) is the $160m first dedicated forestry fund in Africa, and has been in operation since 2010.

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