Dangote-backed Alterra set to buy Kenya’s restaurant chain Java House

Alterra Africa Accelerator Fund, a private equity fund managed by Alterra Capital Partners, backed by Africa’s wealthiest person, Aliko Dangote, is positioned to take the majority ownership of Java House, a Nairobi-based coffeehouse and restaurant chain.

Java House, which has changed hands three times in barely twelve years and was acquired for $100 million by Dubai-based Abraaj Group in 2017 before it was sold to the current owner Actis, runs 73 outlets in Kenya, Rwanda and Uganda.

The value of the deal is still kept under wraps.

Mr Dangote’s biggest bet, a 650,000 barrel-per-day refinery built at $19 billion, started operations in the outskirts of Lagos last January.

The oil and cement magnate currently ranks 73rd on Bloomberg’s list of world’s richest persons, with his net worth topping $27 billion.

Alterra agreed to acquire a majority stake in the entity, while Phatisa, another Africa-focused private equity fund of repute in the food service industry, will take the remaining minority interest, according to a statement issued by the Common Market for Eastern and Southern Africa (COMESA) Competition Commission.

Phatisa’s footprints span Malawi, Congo DR, Mauritius, Kenya, Seychelles and Zambia.

“The Commission will, in accordance with the provisions of the Regulations, determine, among other things, whether the proposed transaction is likely to substantially prevent or lessen competition within the Common Market and whether the proposed transaction is or would be contrary to the public interest as provided for under Article 26 of the Regulations,” COMESA said in the document seen by PREMIUM TIMES.

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For this reason, COMESA is asking suppliers, competitors and customers of the parties to the deal to hand in their written responses by 13 February.

Alterra

Genevieve Sangudi, Eric Kump, and Bruce Steen – all one-time executives at Carlyle Africa – formed Alterra Capital in 2020 alongside Idris Mohammed.

Starting Alterra helped fulfil the dream of those four, who had aspired to set up a firm which would invest in promising African companies that cater to basic consumer and vital business needs.

Alterra would later be backed by Carlyle’s founders, David Rubenstein and Bill Conway, and Mr Dangote as investors.

Mr Dangote had established a reputation for himself in the food processing space at home, where his relatively sizeable investment in sugar, salt, seasonings and pasta earlier in the century has evolved into consumer goods giants, some of which are listed on the Nigerian Exchange.

Alterra has investment in twenty companies on the continent in which it has invested $1.9 billion, according to the information on its website.

In 2023, Alterra raised $140 million in the first close of a $500 million fund for investment in Africa.

The first deployment of the fund went into the acquisition last year of South Africa’s Chill Beverages, owners of the premium mixer brand Fitch and Leedes.

Java House

The restaurant chain came to life in Nairobi in 1999, co-established by two American businesspersons, John Wagner and Kevin Ashley. It now operates as a unit of Star Foods Holdings Limited.

Key brands owned by the business include Planet Yogurt (Kenya), Three Sixty Degrees Pizza (Kenya and Rwanda), Kukito Africa (Kenya) and Foodscape Africa, a centralised procurement and commercial production kitchen producing coffee, cooked food and baked food.
London-based Actis took over Java House in 2019 after Abraaj was liquidated but began making plans to sell it off four years later. Actis, at a point, contemplated an initial public offering as a means of divesting its stake.