Private equity fund manager Phatisa has reached an agreement with mining and metals company Ma’aden on the sale of its controlling shareholding in Meridian Group.
Meridian is a prominent African agricultural inputs business, which distributes about 500 000 t/y of fertiliser across Malawi, Mozambique, Zimbabwe and Zambia.
The Meridian executive team will remain with the business as it partners with the Saudi Arabian Stock Exchange-listed Ma’aden.
“The 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 fertisiler across the region,” Phatisa said in a release on Tuesday.
“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,” said Meridian co-CEO Chris Giannakis.
Phatisa deal partner Rinolan Moodley said Phatisa’s 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 earnings before interest, taxes, depreciation and amortisation tripling over the investment period.
“During this growth trajectory, we positively impacted on more than 13 000 smallholders, of which 69% 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.,” explained Moodley.
In October 2018, Phatisa announced the successful first close of Phatisa Food Fund 2, the successor fund to AAF. The first close achieved a capital commitment of $121.5-million. The fund is targeting $300-million.