Agthia Group PJSC, one of the region’s leading food and beverage companies, has announced acquisition of 60 percent equity stake in Auf Group, a specialised healthy snacks and coffee manufacturer and retailer in Egypt.
Established in 2010, Auf Group processes, manufactures, retails and distributes a broad portfolio of products across Egypt.
Its product basket includes coffee, nuts, healthy snacks and other confectionery products and marketed under the ‘Abu Auf’ masterbrand.
The f&b company said its board of directors has approved the strategic acquisition, which has been advised by the investment banking division of Egypt-based EFG Hermes.
The transaction provides Agthia with a footprint in the lucrative Egyptian snacking market and, together with last year’s acquisition of leading processed meat producer Atyab, facilitates the establishment of Agthia as a major player in the Egyptian consumer packaged goods industry.
The acquisition also reflects the company’s plans to strengthen its portfolio and diversification into branded consumer goods.
It will build on last year’s acquisitions of the GCC’s leading innovative healthy snacks and food company, BMB Group, and the Al Foah dates business, strengthening Agthia’s market, category, and channel portfolio.
Group chairman Khalifa Sultan Al Suwaidi said the company was focused on expanding its footprint in the MENAP region and the acquisition was in line with this plan.
“The acquisition of Auf Group is a compelling opportunity to bolster our delivery of this commitment, while further penetrating one of the region’s fastest-growing consumer markets. Following a record first quarter in 2022, we believe that Auf Group will accelerate Agthia’s strong growth trajectory both now and in the future,” Al Suwaidi said.
Alan Smith, chief executive officer of Agthia Group, said besides providing access to new revenue streams and product lines, the acquisition would help the company to expand its presence in Egypt.
Ahmed Auf, chief executive officer of Auf Group, said the company had grown substantially in Egypt since its foundation in 2010, with consistent investment in corporate infrastructure and human capital, enabling it to build a distinguished brand and remain at the forefront of the local healthy snacks market.
“Auf Group has built a distinguished brand, innovative product offering, and an impressive direct-to-consumer retailing channel. The transaction is testament to the strong appetite from prominent international institutional investors in agile, efficiently run and innovative companies in Egypt which are able to demonstrate strong growth and who can scale both locally and regionally,” Maged El Ayouti, managing director and deputy head of EFG Hermes’ investment banking division said.
During the last twelve months (LTM) period ending December 31, 2021, Auf Group generated total net revenue of around AED236 million and EBITDA of approximately AED58 million, with EBITDA margins of 25 percent.
The transaction will see Agthia acquire 60 percent of Auf Group, while Auf Group’s founders will retain a combined stake of 30 percent in the business and continue to lead the company with the full backing of Agthia’s regional footprint and operational support.
Tanmiya Capital Ventures, an Egyptian private equity firm which invested in Auf Group in 2019, will continue to hold a 10 percent stake in the company.
The acquisition is subject to satisfying customary closing conditions, including obtaining relevant regulatory approvals.
CI Capital was the financial advisor to Agthia for the stake acquisition deal.
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