The Private Equity arms of Investec Asset Management and RMB Ventures have acquired a 72 percent stake in Kamoso Distributor (Pty) Ltd, an umbrella company to ten companies that distributes to Choppies Enterprises.
Kamoso Distributor, a Botswana-based retailer and consumer goods company, was acquired by a consortium that includes Investec Asset Management Private Equity, RMB Ventures, some local investors as well as Kamoso’s senior management team.
The company is a leading manufacturer and supplier of consumer goods and healthcare products to retailers in Botswana, South Africa, Zimbabwe, and Zambia, primarily in Choppies operating sphere of influence. The Company operates from facilities in Botswana and South Africa. Kamoso also operates Liquorama, Botswana’s leading liquor retailer, and Builders Mart, a leading DIY and hardware chain.
The acquisition of 72 percent of the entire issued share capital in Kamoso Distribution (Pty) Ltd was done by Newshelf and IRK, from Standard Chartered Private Equity (Mauritius) III Ltd (SCPE) and Development Capital Partners, LLC (DCP).
According to documents filed with the Competition Authority, Newshelf, a South Africa company controlled by RMB Ventures Seven (Pty) Ltd, a subsidiary of RMB Private (Pty) Ltd, is an indirect subsidiary of FirstRand Investment the holding company of the FirstRand Group. FirstRand Group operates through a portfolio of business franchises, namely RMB, First National Bank and WesBank.
The other acquiring enterprise, IRK, is based in Mauritius, and is controlled by Investec Africa Private Equity Fund 2 LP (Investec Africa Fund) and by Newshelf (the other acquiring enterprise). Investec Africa Fund (the equity investments company) is ultimately controlled by Investec Asset Management (IAM) [a significant component and independently managed entity within the Investec group] which, in turn, is ultimately controlled by Investec (comprising Investec Plc and Investec Ltd) (Investec), a dual listed international, specialist bank and asset manager.
The target enterprise, Kamoso, is a diversified holding company incorporated in Botswana, and was controlled by the private equity arm of Standard Chartered Plc.
The complex legal connections between the companies, according to regulatory notices reveals that the other non-controlling shareholder in Kamoso, DCP, also sold its stake. DCP is an investment management company registered in Mauritius, with an exclusive focus on frontier and emerging markets. The firm’s primary strategy is to make long-term investments in a concentrated portfolio of businesses operating in Africa.
Kamoso distributes products and renders services throughout Botswana through its subsidiaries which comprise of the following, Liquorama, a liquor distributor and retailer with 46 stores across the country, offering a selection of wines, beers and spirits. Another subsidiary is Builder’s Mart, which retails a range of building materials, hardware and electrical products through its 18 retail stores.
Keriotic Investments (Pty) Ltd, a subsidiary of Kamoso is engaged in distributing various commodities from food to non-food products, as well as packaging materials to retailers. Mediland Healthcare Distributors (Pty) Ltd, specialises in importing and distributing medical health care products and equipment to private hospitals and the government of Botswana.
Honeyguide (Pty) Ltd, is involved in milling and packaging of sorghum and maize and producing mixed fowl feeds. ILO Industries (Pty) Ltd, is engaged in the processing and packaging of rice, samp, beans, spices, flour, pulses, soups and dried fruit. RBV Consultants (Pty) Ltd and RBV Marketing (Pty) Ltd, are involved in the manufacturing and distribution of tissue paper. Real Plastic Mould (Pty) Ltd, is involved in the production of bottled water, plastic cutlery and crockery, detergent and plastic pre-form while Mont Catering and Refrigeration (Pty) Ltd, is involved in the import and supply of air-conditions, fridges and spare parts and catering equipment. All the above companies, which were distibutors to Choppies, were subsidiaries of Kamoso.
Kamoso was formed in 2015 as part of an investment by Development Capital Partners, a New York investment firm and Standard Chartered Private Equity.
Kamoso was mostly a supplier to Botswana’s largest budget retail chain, Choppies Enterprises, before StanChart PE and New York investment firm Development Capital Partners (DCP) bought a 72 percent stake in 2015 and expanded operations.
Stanchart PE and DCP bought the stake in Kamoso in a deal that was reported to be worth P452 million ($43.35 million) from Choppies’ biggest shareholders, Ramachandran Ottapathu and Farouk Ismail. The Choppies directors sold Kamoso in a quest to improve corporate governance and avoid conflict of interests by owning a company that supplies to Choppies. Both the PE and DCP have now sold substantial portions of their shareholdings though Stanchart PE retains a 13 percent shareholding in Choppies, reportedly bought at a price of around P600 million in 2014.
Announcing the new venture this week in a statement, Derrick Soanes, Kamoso’s Chief Executive, said, “We are happy to have concluded this transaction, and to welcome RMB Ventures and Investec Asset Management as our new shareholders. We have big plans for regional expansion, and the team and I are excited to be building this company alongside such strong and respected financial partners.”
Peter Baird, head of African Private Equity at Investec Asset Management, noted that, “Kamoso has a long track record of supplying top quality products at the best prices. It has built a strong business on providing value for money, including in its retail offerings. In partnership with RMB Ventures and management, we plan to build a regional champion from our strong base in Botswana.”
RMB Ventures co-head Andrew Aitken reiterated the views “Kamoso exhibits many of the elements of a very successful investment – a passionate and dedicated management team, market leading products, and deep and long-standing customer relationships. We are particularly excited about our first investment in Botswana, and we hope to provide impetus to the economy through our plans to significantly grow Kamoso’s franchises.”