AIIM creates African cold storage platform with acquisition from Oceana Group
African Infrastructure Investment Managers (AIIM) said Tuesday it has partnered others to create a cold chain logistics platform, Commercial Cold Holdings (CCH), with the initial acquisition of CCS Logistics from Oceana Group.
Funds managed by AIIM intend to invest up to $150 million in the platform, inclusive of the initial asset acquisitions as well as a pipeline of further acquisitions and greenfield development projects.
AIIM, one of Africa’s largest infrastructure-focused private equity fund managers, has been on a deal-making spree this year. The firm said that, through its flagship South African IDEAS Fund and pan-African AIIF4 Fund, it will have a controlling 59.2% stake in CCH.
The other partners in the platform include Bauta Logistics and Mokobela Shakati (Pty) Ltd. The initial acquisition transaction was financed by a mix of equity and debt financing.
In a separate statement, JSE-listed Oceana Group said the total consideration of the sale deal is ZAR760 million ($43 million) net of the value accruing to minority interests in the Namibian unit (CCS Namibia (Pty)- 31%) and Duncan Dock (CCS Ports (Pty)- 30%) with the implied 100% enterprise value, including minority interest, at ZAR895 million.
CCS Logistics has been operational for over 50 years and is an established player in South Africa’s temperature-controlled logistics (TCL) market. It currently operates about 100,000 pallets of storage across six facilities in Johannesburg, Cape Town and Walvis Bay, Namibia.
Through this transaction, AIIM seeks to establish a pan-African cold storage platform.
AIIM Investment Director Damilola Agbaje said the cold chain logistical infrastructure sector is underdeveloped, and in places non-existent, across sub-Saharan Africa and this investment diversifies AIIM’s current portfolio into a high growth and high impact area.
“South Africa, which possesses the continent’s most advanced TCL infrastructure at 13m3 of cold storage per 1,000 residents, lags comparable economies such as Egypt and Brazil, which have 105m3 and 83m3, respectively our research has indicated,” said Agbaje.
He noted that with current population growth rates mixed with the rapid rate of urbanization, the regional deficit in temperature-controlled logistics was expected to worsen. CCH would focus on acquiring and developing facilities with strategic physical locations and/or integration with food producers, wholesalers and retailers.
He said up to 70% of CCS throughput will come from staple foods that were critical for domestic food security. Maintaining a national network of state-of-the-art facilities to ensure a continuous supply of staple foods.
This marks the third investment signed by AIIM’s fourth generation pan-African infrastructure fund, AIIF4, a thematic investor with a strategic focus on the mobility and logistics, energy transition and digital infrastructure sectors.
“Food security in the current global and African context is a topic of increasing importance, and we believe the CCH platform will play a role in addressing these critical matters. We look forward to further announcements as AIIF4 continues to expand its portfolio” said Olusola Lawson, Managing Director & Co-Head of AIIM.
ENS Africa were the legal advisors, PWC were the financial advisors on CCS and Frost & Sullivan were the commercial advisors in the initial transaction.
