Dubai equity firm Abraaj Group acquires Java House for Sh10.3 billion

Java Restaurant a long Mama Ngina street. ON 03/07/2017 PHOTO: JENIPHER WACHIE

Dubai-based private equity firm Abraaj Group has taken over Kenyan coffee chain Java House.

The firm announced the deal, which will see it acquire 100 per cent stake in Java from private equity firm Emerging Capital Partners (ECP) and the Company’s founder and chairman Kevin Ashley, was nearly complete.

“Africa’s rapidly expanding middle class, sustained population growth and increasing urbanisation are creating compelling investment opportunities in multiple sectors, and we believe Java House is ideally positioned to benefit from these trends,” said Abraaj Group Managing Partner and Global Head of Private Equity Mustafa Abdel-Wadood.

While the firm did not disclose the value of the deal, industry insiders said it was worth a cool $100 million (Sh10.3 billion), making a neat return for ECP, which bought majority stake in the coffee chain at around Sh4.1 billion five years ago.

Java House founder Mr Ashley sold a 90 per cent stake to the Africa-focused private equity in 2012.

It has an unrivalled regional footprint of 60 stores across 10 cities in Kenya, Uganda and Rwanda.

Java operates three brands - Java House; Planet Yogurt, a self-service frozen yoghurt chain and 360 Degrees Artisan Pizza, an upmarket Italian pizzeria concept.

Java House currently serves over 320,000 guest checks per month, offering food and drinks covering 25 different categories and employs 2,000 people.

Java House has grown from 13 shops in Nairobi since it was established in 1999 into East Africa’s largest casual dining brand, building an “eat-out” culture.

It also operates commercial coffee roasters, providing quality coffee and bean sales to its own stores and to supermarkets, hotels, restaurants and wholesale buyers.

Abraaj Group said they will expand the business through more acquisitions by leveraging the coffee house’s market leadership.

The firm has invested $3.2 billion (Sh332 billion) in 80 transactions across the continent in a range of sectors, including consumer, energy, financials, healthcare and utilities.

In Kenya, the firm has had investments in ARM Cement, Brookside Dairy and off-grid solar power in Laikipia County.

The transaction will close once customary closing conditions and regulatory approvals are obtained.