Phatisa, a leading 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).
Meridian is a prominent African agricultural inputs business, distributing approximately half a million tonnes of fertiliser across four countries; generating revenues in excess of US$ 300 million. 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.
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.
Chris Giannakis, Meridian co-Chief Executive Officer said:
‘Through the combined ability and vision of management and Phatisa, Meridian has developed its business to become the regional fertiliser market leader. We are excited to embark on our next chapter with Ma’aden, which will bring a global scale and strategic aspect to Meridian’s entrepreneurial culture.’
Rinolan Moodley, Deal Partner at Phatisa commented:
‘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.’
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. In October 2018, Phatisa announced the successful first close of Phatisa Food Fund 2 (PFF 2), the successor fund to AAF. The first close achieved a capital commitment of US$ 121.5 million; the fund is targeting US$ 300 million.
Rothschild acted as transaction adviser and DLA Piper as legal adviser to Phatisa and Meridian.
The transaction is subject to conditions precedent, including regulatory approvals.
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