Wendel Group is committing to spend up to €120 million over the next few years to acquire a 40% stake in SGI Africa, a pan-African developer and operator of shopping malls. The private equity firm will kick off its commitment with an initial investment of €25 million once certain customary conditions have been met in the coming weeks.
SGI Africa was launched in 2015 by CFAO Group, a distributor of brands, which retains 40% of the company. The balance of 20% will be held by FFC, a partnership between CDC international Capital and the Qatar Investment Authority.
SGI Africa operates shopping centers primarily through the PlaYce brand. It opened its first PlaYce shopping center in Côte d’Ivoire in late 2015 and has plans to expand its business into seven other West and Central African countries, tapping into the rapid growth in the retail sector pushed by the urbanization and expansion of middle class consumers in the region. Within the next 5 to 7 years, the company expects to have developed some 20 shopping centers, representing about €500 million in investment financed by a mixture of shareholder equity and bank debt.
“With this investment in SI Africa, Wendel is pursuing its sectorial and geographic diversification strategy by investing in the shopping malls sector [which] will be central to African growth,” commented Frédéric Lemoine, Chairman of Wendel’s Executive Board. “I have every confidence in SGI Africa’s well-directed development plans in eight African countries.”
The deal represents Wendel’s third direct investment in Africa, following earlier deals in HIS and Saham Group. On completion, the SGI Africa deal brings Wendel’s total investment in African companies to more than €800 million since 2013.