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Phatisa's AAF delivers first exit

Anna Lyudvig
April 23, 2019, 9:35 p.m.
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Phatisa,  an African development and private equity fund manager, has reached an agreement with Ma’aden on the sale of its controlling shareholding in Meridian Group (Meridian).

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Phatisa,  an African development and private equity fund manager, has reached an agreement with Ma’aden on the sale of its controlling shareholding in Meridian Group (Meridian).

The transaction is subject to conditions precedent, including regulatory approvals.

Meridian is a prominent African agricultural inputs business, distributing approximately half a million tonnes of fertiliser across four countries; generating revenues in excess of $300m.

Meridian’s flagship fertiliser brand, Superfert, is available throughout Malawi, Mozambique, Zimbabwe and Zambia, and has earned a loyal customer base due to its superior quality and bespoke blends, proven to stimulate agricultural productivity.

Through its African Agriculture Fund (AAF), Phatisa initially invested expansion capital into Meridian in 2014, enabling the business to accelerate growth, becoming an integral part of the agricultural value chain for smallholder and commercial farmers across the region.

Phatisa was the lead investor of a consortium including Mbuyu Capital as a co-investor.

Rinolan Moodley, Deal Partner at Phatisa, said: “Meridian exemplifies Phatisa’s ethos of development equity, demonstrating how private equity investments can deliver a tangible and sustainable impact on food security within the continent, as well as driving superior returns for our investors.” 

“Our capital and insight were instrumental in developing Meridian’s distribution networks, providing smallholders with access to customised fertiliser blends that continually drove volume growth and resulted in EBITDA tripling over our investment period. Importantly, during this growth trajectory, we positively impacted over 13,000 smallholders – 69% of which were women – with our training programmes and technical assistance facility,” he added.

Ma’aden is a mining and metals company based in Saudi Arabia, operating a diverse portfolio of mineral assets including phosphate, aluminium, gold and copper.

The Meridian executive team will remain with the business, partnering with Ma’aden, a diversified resources company, listed on the Saudi Arabian stock exchange. 

This partnership will further strengthen Meridian’s market position, leveraging Ma’aden’s global presence and integrated supply chain, allowing the company to better service the growing demand for fertiliser across the region.

Michiel Timmerman, Managing Partner at Mbuyu Capital, said: “Meridian’s market leadership, strong management team and Phatisa’s lead as a specialist in the sector made Meridian an excellent opportunity to create attractive financial returns for investors with development impact as a co-product.”  

“Phatisa’s technical assistance facility, associated with its African Agriculture Fund (AAF), enabled the firm to leverage the impact of its financial investment, through the longer-term initiatives needed to develop the smallholder agriculture sector and create sustainable demand for Meridian’s products.”

Rothschild acted as transaction adviser and DLA Piper as legal adviser to Phatisa and Meridian.
 
 

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