Carlyle’s Africa spinout Alterra may score an exit as J&J Group gets a suitor

 Carlyle’s Africa spinout Alterra may score an exit as J&J Group gets a suitor

Alterra Capital Partners, an Africa-focused private equity firm spun out of US-based buyout giant Carlyle, could soon score an exit from its seven-year-old investment in Beira, Mozambique-headquartered logistics company J&J Group.

Alterra-managed Carlyle Sub-Saharan African Fund may exit J&J Group as part of the privately owned logistics company’s potential acquisition by South Africa’s Imperial Logistics.

J&J Group provides cross-border trucking services. It also offers integrated transport logistics services ranging from initial vessel logistics to warehousing and short-haul in-country transport. It is present across Mozambique, Zimbabwe, Zambia, South Africa, Malawi and the Democratic Republic of Congo.

In 2014, Carlyle and Investec Asset Management, a global investment manager with African roots, had coinvested in J&J Africa, a pan-African logistics company founded in 1995 that transports general cargo along the Beira corridor.

This was the second investment by Carlyle’s Sub-Saharan Africa Fund. This $700 million fund is now managed by Alterra, which was spun out of Carlyle last year.

Some of the J&J group companies had raised additional capital from alternative investment funds. In particular, one of the affiliates had raised debt funding from Investec’s Ninety One Africa Credit Opportunities Fund three years ago.

Imperial said it was in talks to acquire J&J Group but hadn’t yet signed any deal. It added that a potential transaction would depend on the approval of DP World, which is separately in the process of acquiring Imperial Logistics.

Dubai-based port operator DP World had earlier this month inked a preliminary agreement to buy the Johannesburg-listed company for as much as ZAR12.73 billion ($882 million).

The deal comes soon after Imperial signed an agreement to sell its South American shipping business to Hidrovias do Brasil SA at an enterprise value of $90 million. Imperial had expanded in 2014 through the South America shipping business in the Hidrovia-Paranha-Paraguay waterways and with access to the largest seaports in the region.

Imperial has been trying to refocus its business around Africa and decided to exit the international operations. It had sold its European shipping business last July as part of the strategy.

Also read: Carlyle’s Africa spinout Alterra ropes in two ECP partners

Vivek Sinha

The Capital Quest