Dashen Brewery, one of the subsidiaries of Tiret Endowment, has sealed a successful deal with the asset manager of Duet Group, a British consortium, to sell substantial shares.
About a month ago, the board of Dashen chaired by Tadese Kassa (Tinkishu), CEO of Tiret, was under negotiation with the Duet Group about possibly selling shares. According to Capital sources at the brewery company, the two companies concluded their negotiation a week ago in London. Bereket Simon Board Chairman of Tiret and Tadesse Kassa signed the deal with Duet officials.
The brewery has agreed to sell about 41 percent of shares to the London based equity firm. Sources at the brewery told Capital that the first down payment which is believed to amount to 60 million dollars, according to their agreement, has already been paid a week ago from the total 90 million dollar capital injection that Duet is expected to pay.
According to a Duet statement recently released, the investment will take the form of equity injection from the newly formed Duet Beverages Africa Ltd which will be managed by the Duet Africa Private Equity team, together with Vasari, an industrial partner which is going to share the risk.
Proceeds of the investment will be used to expand the Company’s capacity and enhance distribution channels Capital learnt. Dashen’s administrators plan to build their second beer production centre in Debre Birhan, which is part of the expansion project. The expansion will give an option to Dashen to increase its production close to one million hectolitre per annum from the current 750,000 hectolitre, according to information obtained from the brewery proposal.
The deal was led by Saad Aouad, CEO of Duet Africa Private Equity, Demissie Assefa, Managing Director of Duet Ethiopia, Afsane Jetha, Director Duet Africa Private Equity and Neil J Everitt, Managing Partner Duet Beverages Africa. Norton Rose LLP and PwC have also advised on this transaction, according to the Duet statement.
Henry Gabay, Co-Founder and Co-Chairman, Duet Group, says: “The economic performance of Ethiopia over the last eight years has been nothing short of outstanding. We are very excited about consumer-driven businesses in the country.”
“We have been very impressed by what has been achieved at Dashen. We believe Duet and Vasari will add tremendous value for the next growth phase of the company. We are also proud of having TIRET Group as our partner, with whom we will evaluate other opportunities in various sectors,” added Henry on the firm’s statement.
Tadesse Kassa, CEO of the TIRET Group, was also quoted as saying: “We are pleased to welcome our new partners to Ethiopia. We expect them to enhance our capabilities by bringing international sector expertise and management skills to the business and to the country. With this investment, we plan to focus on our technical expertise in a rapidly growing market.” However he declined to further comment to Capital saying that the negotiation is still in its early stage.
In September this year, Dashen took part in a bid to acquire Meta Abo Brewery in a joint venture with the asset manager of Duet Group though their offer was much lower than other bidders. Dashen with Duet had offered 173 million dollars for Meta, which was still twice the floor price.
The two firms are said to have agreed that if the consortium was successful, Meta would be under Dashen while Duet would get 51 percent of the brewery.
Even though it is young, Dashen established in 2000, has gained a substantial share of the Ethiopian beer market. Dashen’s subsidiary, Gonder Malt Factory, which will be the second malt factory in the country, is expected to commence its production in the near future.
Duet is a global alternative asset manager founded in 2002 with over 2.4 billion dollars of equity under its management as of January 2011 across its hedge funds and real estate and infrastructure investments. The group employs 73 professionals in London, New York, Tokyo, Singapore, New Delhi, Dubai and Istanbul.