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Abraaj takes stake in Tunisia’s SAH

In the latest deal for its second North African Fund, private equity investor The Abraaj Group has acquired a 49% stake in JM Holding, a majority owner of publicly-listed Société d’Articles Hygiéniques or SAH, a producer of disposable household and personal care products in Tunisia. The JM Holding stake was acquired from the company’s founders and financial terms of the deal were not disclosed.

The deal marks the eighth investment for Abraaj’s second generation North African fund, which held its final close at $375 million in August 2015.  The fund’s strategy is to target mid-market opportunities which look set to benefit from the demand created by an expanding middle class in the region, particularly Algeria, Egypt, Morocco and Tunisia.

SAH fits neatly into the profile of investments that Abraaj prefers to make, allowing the private equity firm scope to influence the strategic direction and growth of the firm. The deal allows Abraaj to help SAH consolidate its market position and expand its product offering across sub-Saharan Africa, in particular in the Central African Economic and Monetary Community (CEMAC) and the West African Economic and Monetary Union (UEMOA) markets which offer a total addressable market of US$480 million with projected average annual growth rates of 10% and 11% respectively. To support this growth, there are plans to build a manufacturing plant in West Africa as well as improve the production efficiency and product innovation of its existing operations. Additionally, the business will be further institutionalized through the introduction of enhanced safety standards and environmental performance as well as improving the company’s management processes and reporting mechanisms.

SAH is a household name for personal care products in Tunisia and other North African markets. The company was founded in 1994 and produces baby and adult diapers, feminine sanitary pads and household products such as paper towels, tissues and toilet paper. Today, it has a 60% share of Tunisia’s baby diaper market and exports its products to a further 18 countries in Africa.

In 2008, Emerging Capital Partners invested in the company, retaining their stake until the firm’s IPO in December 2013 when the exit delivered the private equity investor a 2.4x cash return.

As part of the transaction, Abraaj takes up three board seats at JM Holding, and will be represented by Ahmed Badreldin, the private equity investor’s Regional Head and the lead partner on this transaction, Adel Goucha and Amine Allam, a Managing Director and a Director respectively in the firm’s Middle East and North Africa investment team.

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