Investec Asset Management Private Equity (Investec) has divested its equity holding in Ashwah Holdings (Ashwah), parent company of Daraju Industries (Daraju), by selling its significant minority stake back to the company.
Daraju is a leading Nigerian manufacturer of high-quality and attractively priced branded personal and household care products. Selling primarily through distributors and wholesalers, the company has market presence in all 36 Nigerian states and has developed some of Nigeria’s best-known local consumer brands, including MyMy, Rana, Fressia, Farha, Liby, and Green.
Investec’s growth equity investment into Ashwah was made in 2013, subscribing for new shares representing a significant minority stake in the company. This investment enabled the expansion of production and distribution capacity, the addition of several new product lines, and the consolidation of production at the company’s Ota facility. Given strong demand, the company has continued to add to production, packaging and distribution capacity and has also backward-integrated through the addition of a saponification plant to lessen dependence on imported raw materials. Despite challenging macroeconomic conditions in Nigeria, Daraju has grown strongly, significantly increasing its market share.
Peeyush Garg, the company’s founder, Executive Chairman and primary shareholder, said, “Our partnership with Investec has been highly productive, and has allowed us to provide our Nigerian customers with a wider range of top-quality personal and household care products, available throughout Nigeria, and offered at great value for money. We are proud to be in a position where we are able to buy out our partners, and to continue our profitable growth.”
Sanjeev Gupta, a minority investor and business advisor of Mr. Garg said “It’s remarkable how well Investec worked with management to prepare the company, develop its process and systems, make it ready for a financial investor and then to continue with their deep insights and counsel to make this a successful business model. It’s a case study of how family owned companies and private equity investors can work well and reap the benefits of mutual support”.
Mark Jennings, an Investment Principal in Investec’s private equity group, said: “We are pleased and proud to have played a part in the company’s success and its development into a strong local champion. Under the leadership of an outstanding management team, the business has delivered remarkable performance in very challenging macroeconomic conditions. We wish the company and all involved with it well in the next chapter of its development.”
Kobina Sam, an Investment Principal in Investec’s private equity group also added, “This is an inspiring story of an entrepreneurial company, growing profitably and investing in itself despite the challenges and uncertainties in the Nigerian economy. We are pleased to have contributed to this journey and hope to have future opportunities to work with this exceptional team of business builders.”
Investec Asset Management established an African private equity capability in 2008. The Private Equity strategy focuses on growth capital and buyout investments in established mid-market and larger companies in Africa, with the objective of supporting the creation of local or regional champions in their respective industries.