Actis sells Java House to two private equity firms

This will be the fourth time the ownership of Java House - founded in 1999 by Irish-American Kevin Ashley - will be changing hands. Photo / File
What you need to know:
- A notice by the Comesa Competition Commission shows that Alterra Capital is set to assume majority shareholding in Java while Phatisa will have controlling rights
UK-based Actis has signed an agreement to sell Java House to two Africa-focused private equity funds for an undisclosed sum.
A notice by the Comesa Competition Commission, a regional antitrust watchdog, shows that Alterra Capital is set to assume majority shareholding in Java while Phatisa will have controlling rights despite its minority stake.
Alterra Capital focuses on investments in Africa notably those in food and beverage, hospitality, retail, telecommunication, technology, financial services, logistics, and infrastructure.
Phatisa, set up in 2005, has interests in the food value chain.
“The parties submitted that the proposed transaction would enable the seller (Actis) to exit and realise its investment and will enable Alterra and Phatisa to acquire controlling stakes in the target and promote the growth of its business,” the Comesa Competitions Commission reads in part.
This will be the fourth time the ownership of Java House - founded in 1999 by Irish-American Kevin Ashley - will be changing hands.
The restaurant operator received its first outside investment in 2012 from Emerging Capital Partners (ECP), which gained a 90 percent stake in the deal.
ECP and Mr Ashley - who held a 10 percent stake in Java - in 2017 sold out to Dubai-based private equity fund Abraaj Group, which took full ownership of the company.
The transaction was reportedly valued at Shs370.6b (Sh13b) at the time, making it one of the largest in the restaurant business in Kenya’s history.
At the time of ECP’s investment in Java, the company had 17 stores. The restaurant now has 73 branches in Kenya, Uganda and Rwanda after an aggressive expansion that saw it add Planet Yogurt, Foodscape, Sixty Degrees and Kukito Africa food brands.
Unlike ECP, Abraaj did not reap from its investment in Java. The Dubai-based private equity fund filed for liquidation in June 2018 in Cayman Islands in the wake of a scandal that showed it had misappropriated funds from its investors and lenders, besides falsifying financial accounts.
The Dubai Financial Services Authority in July 2019 fined two Abraaj entities - Abraaj Investment Management and Abraaj Capital - a total of $315m for deceiving investors and the regulator.
Java House’s competitors in Uganda include Café Javas, KFC, and Carmel, among others.