By Dipo Olowookere
Africa’s largest mezzanine fund manager, Vantage Capital, has provided €19 million of mezzanine funding to a leading distributor of oil & gas products in Côte d’Ivoire, Pétro Ivoire.
The company operates a network of 72 petrol stations across the country (3rd placed after Total and Vivo Energy) and is also the largest gas distributor, with over 1.7 million gas bottles in circulation. It also holds a 40% stake in Côte d’Ivoire’s largest gas storage and bottle filling facility, SAEPP. The company sold 230 million litres of petroleum products in 2017.
Vantage’s funding has enabled the founding family to regain a controlling equity stake in the company by facilitating the buy-back of equity from two exiting private equity investors, Amethis and the West Africa Emerging Markets Growth Fund.
Founded in 1994 by Mathieu Kadio-Morokro, the company is now run by his son, Sébastien Kadio-Morokro, who was recently selected as one of the top ten Young Global Leaders in sub-Saharan Africa by the World Economic Forum. The exit of the private equity investors has made room for a French-based gas trading company, Geogas Entreprise SAS, to take a stake in the business alongside the founding family.
This transaction represents Vantage Capital’s 27th mezzanine transaction across three generations of mezzanine funds, with its portfolio of mezzanine investments now spread across nine countries in Africa. Outside of South Africa, Vantage has now invested in ten transactions for a total of $138 million across Côte d’Ivoire, Ghana, Nigeria, Uganda, Kenya, Mauritius, Namibia and Botswana. Pétro Ivoire is Vantage’s first investment in Francophone Africa and the mezzanine fund manager is currently pursuing several opportunities in Morocco, hoping to announce its first deal in that country in 2019.
Luc Albinski, Managing Partner at Vantage Capital, explained that “Vantage is proud to have structured the first-ever leveraged management buyout in Francophone West Africa. Vantage’s mezzanine product provided the ideal solution to Pétro Ivoire’s shareholders: enabling the private equity investors to achieve a successful exit and the founding family to acquire a controlling stake in their business without having to write out a big equity cheque.”
David Kornik, Partner at Vantage Capital, added that “Pétro Ivoire is run by an experienced and deeply talented management team. They have successfully established the business amongst the leading players in Côte d’Ivoire’s downstream oil & gas sector and we look forward to partnering with them through the company’s next phase of growth.”
Warren van der Merwe, Managing Partner at Vantage Capital, said that “we are delighted to conclude our first transaction in Francophone Africa. We believe Pétro Ivoire to be a gem. After being backed by several private equity funds over the past decade, the founding family has now been able regain control of their business. The new strategic alliance with Geogas Entreprise SAS, a major gas trading company, bodes well for the future of Pétro Ivoire.”
Sébastien Kadio-Morokro added, “Our vision is to be one of the largest African oil & gas distribution companies. With Vantage Capital as our financial partner, we intend to entrench our position as the leading company in this sector in Cote d’Ivoire and begin to expand regionally.”
Jean-Thomas Lopez, Portfolio Manager at Amethis, said “Amethis is proud to have supported the founding family for the last five years, creating value together by doubling the size of the network – which included the acquisition of the Essenci network in 2014- as well as significantly enhancing access to gas by Ivorian families. This has helped slow down deforestation through the reduction in the use of fire-wood.” Clifford Chance (in Morocco) and Cabinet Chauveau (in Côte d’Ivoire) acted as legal counsel to Vantage. Carlara International (France), CMS Francis Lefebvre (France) and Emire Partners (Côte d’Ivoire) respectively acted as legal counsel to Geogas Entreprise SAS, Amethis & West Africa Emerging Markets Growth Fund and Pétro Ivoire. Dentons (in Morocco) provided tax advice, KPMG (in France) and Ernst & Young (in Côte d’Ivoire) were the financial advisors, OnPoint Africa (in Côte d’Ivoire) provided commercial advice, Marsh (in France) provided insurance advice and Ibis Consulting (in South Africa) reviewed the environmental impact.
Adedapo Adesanya