It was reported by the Confectionary News website on April 22nd that prolific growth market investment house Abraaj Group had acquired Kool Food, for an undisclosed figure.
Kool Food, who are based in Casablanca, are one of Morocco’s and indeed North Africa’s leading confectionary manufacturers. The sale is representative of the progress of Kool Food, who have established a strong market position despite only being founded in 2010.
Abraaj, who some days earlier carried the announcement of the acquisition on their own website, stated that they found Kool Food an attractive proposition as they were “one of the few chocolate based manufacturers in the region targeting the fast-growing mass consumption market with affordable products.”
Abraaj, who manage $7.5billion worth of assets and have reportedly returned $4.3billion to investors since 2002 – the industry standard in growth and emerging markets – are highly regarded, with EMEA Finance calling them the Best Private Equity House in Europe, the Middle East, and Africa in 2013. They are also known for their ethical and sustainable approach, which would have played a part in their decision to invest given Kool Food has been prominent in this area themselves.
Kool Food is not the first food related investment Abraaj have made in Africa. Others include Moulin d’Or, Tunisia’s leading bakery, Brookside, the East African dairy business, and Fan Milk, who are in the same industry but in West Africa. Geographically, this is Abraaj’s third Moroccan investment since 2012.
Abraaj’s Intentions for Kool Food
It appears that Abraaj have undertaken this acquisition with the long-term firmly in mind. Upon announcing the acquisition, Abraaj indicated that their near-term objectives include diversifying the Kool Food product range, while still sticking within their niche, and consolidating the firm’s market position in Morocco. Diversifying the range is expected to be achieved via a strong investment program that will look at market gaps and identifying where they can offer improved products against their competitors.
Longer-term, Abraaj intend to grow international distribution and establish the business as a prominent industry presence across North Africa and in the Middle East region. Speaking about the acquisition, Tarek Kabil of Abraaj said, “Kool Food is well-positioned in the Middle East and North Africa region as a successful local producer of quality chocolate confectionery products affordable to the region’s burgeoning consumer classes.
By building out Kool Food’s current product offering with attractive new products and extending its pan-regional distribution, Abraaj will catalyze the company’s growth into one of the leading chocolate confectionery players in the region.” Founder and CEO of Kool Food, Anas Lahlou, who is staying with the company following the acquisition, added, “Partnering with Abraaj will accelerate Kool Food’s growth, building on our hard work over the last four years to develop this company into a leading confectionery brand recognized for making popular chocolate products.
We are extremely excited about the opportunity to take Kool Food to the next level and look forward to working with the Abraaj team.” This acquisition represents another example of the growing attractiveness of the Africa and Middle East regions, and highlights the advantages firms with a presence or reputation in the area already will hold as the markets there continue to develop.