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23-Jul-2007
EMERGING CAPITAL PARTNERS SELLS STAKE IN AFRICAN
NATURAL RUBBER COMPANY FOR 3.4x INITIAL INVESTMENT
Investment exemplifies developing strength of agribusiness sector
for private equity investing in Africa
WASHINGTON, D.C. – July 23, 2007 – Emerging Capital Partners LLC (ECP), an international private equity firm focused on investing across the African continent, today announced the sale of its entire position in Société Internationale de Plantations d'Hévéas (NYSE Euronext: SIPH), Africa's leading natural rubber producer and exporter. ECP's exit was made via block sales on the NYSE Euronext Paris exchange and the sale of call options, with total proceeds of $49.8 million representing 3.4x the fund's initial investment. The highly structured $14.8 million investment consisted of common shares, convertible notes and options and was made through the AIG African Fund Infrastructure Fund L.L.C. (Africa Fund I) in March 2005.
"Our exit from SIPH exemplifies how the African agribusiness sector is becoming more attractive for private equity investment, as the continent has a comparative advantage in the production of many agricultural products," said Vincent Le Guennou, executive vice president of ECP. "Through the implementation of leading edge agricultural techniques – and by establishing the right partnerships and management team – the company's revenue grew by 44 percent annually over our two-year holding period."
With production in excess of 92,000 tons, SIPH is Africa's leading rubber exporter through its two majority-owned subsidiaries: Ghana Rubber Estates Ltd. (GREL) in Ghana, and Société Africaine de Plantations d'Hévéas (SAPH) in Côte d'Ivoire, which is listed on the Abidjan Stock Exchange (BRVM). Additional plantations are located in Nigeria. SIPH is majority-owned by the SIFCA Group, a diversified agribusiness conglomerate with activities in Cote d'Ivoire, Benin and Ghana. SIPH has also developed a strong partnership with Michelin, the world's leading tire manufacturer and largest purchaser of natural rubber, which has been technical operator of both SAPH and GREL since 2003. In 2006, ECP assisted in the acquisition of Michelin's rubber plantations in Nigeria in exchange for Michelin taking a 20 percent stake in SIPH.
"SIPH is a well-governed company with a world-class partner in Michelin," said Hurley Doddy, chief operating officer. "ECP helped it to negotiate successfully with Michelin, implement standard financial reporting, and identify appropriate acquisition targets."
Today, SIPH exports high-quality natural rubber which commands a premium on international markets, proving that African producers are globally competitive. Since 2002, natural rubber prices have been rising steadily, fueled by the global growth in the automotive, pharmaceutical and chemical industries.
ECP's Africa Fund I continues to hold stakes in three companies in the agribusiness and related sectors throughout Africa including: Somdiaa, the leading sugar cane producer, refiner and distributor in Central Africa; Agromed SA, a leading processor of dairy products in Tunisia; and Charaf Corporation, a distributor of fertilizer in Morocco. ECP has also achieved successful exits in the West African food processing sector through its West Africa Growth Fund including: Cosmivoire S.A., Société Ivoirienne de Productions Animales (Sipra) and Nestlé Côte d'Ivoire S.A.
ABOUT ECP
Emerging Capital Partners (ECP) is the first private equity firm to raise more than $1 billion to invest in companies across the African continent. The ECP team has a seven-year track record of pan-African investing through five successful funds. The firm's investment strategy is focused on delivering consistently above-market returns to investors that are uncorrelated to the U.S. and other global economies. For more information, please see www.ecpinvestments.com.
CONTACT
Jeannine Lewan, FD for ECP
212-850-5612
jeannine.lewan@fd.com