March 27, 2017

Bob Geldof’s Africa-focused private equity firm, 8 Miles, has made a strategic investment of an undisclosed amount in exchange for a minority stake in fresh-cut tropical fruit producer Blue Skies.

Founded in 1997 by British entrepreneur Anthony Pile and incorporated in the UK, Blue Skies has operations in multiple African countries including Ghana, Egypt, South Africa, as well as in Brazil and the UK. Pile created Blue Skies with the intention of creating a company that produces fresh-cut tropical fruits and fresh-squeezed fruit juices in proximity to where the fruit was grown – enabling the company to deliver “ready to eat” fruit from farm to retail within a 36-hour time frame, according to the company website.  From a company of 35 employees that shipped its first shipment of pineapple from Ghana to the UK in February 1998, Blue Skies has grown to now have over 4,000 employees and revenue of US$113 million for the year ending December 2016.

The company plans to use the investment to support the expansion of its core fresh-cut fruit business, to increase production capacity in South Africa, to launch a new fresh juice operation in Egypt, and for the development of new product lines for sale on African markets.

8 Miles

8 Miles, which was named for the shortest distance between the African and European continents, typically makes investments of between $15 million and $45 million across a range of consumer-driven sectors with a geographical focus on African countries that display strong macroeconomic themes, have stable governance, and a favorable stance toward foreign investors reflected by a record of private sector reforms, according to the firm’s site.

Other recent investments made by 8 Miles in the food and agriculture sectors in Africa include an undisclosed commitment to Ethiopian premium beef company Verde Beef Processing in April 2016 in exchange for a significant minority stake in the business.

Founded in 2014 by Ethiopian venture firm, Verdant Frontiers, Verde Beef is led by two agribusiness managers – Bruce Hamilton and Arnold Krul, both residing in-country, according to the company’s website.

Ethiopia claims the sixth largest cattle herd in the world, and Verde Beef currently owns and manages a 1,300 hectare feedlot and crop farming operation in Adami Tulu, where it fattens cattle and leverages Ethiopia’s ideal climate, central MENA location, and low domestic cost of inputs, as it begins exporting high-quality beef.

Soon after, in August 2016, 8 Miles led a consortium of investors including the Nigeria-focused African Capital Alliance (ACA), and DEG –  Deutsche Investitions und Entwicklungsgesellschaft, the German Development Finance Institution – in an $80 million investment in Nigeria-based biscuit manufacturer, Biloxxi Industries.

Despite continued low crude oil prices having a ripple-effect throughout Nigeria’s economy, the country’s snack sector, especially in the country’s urban centers, has been resilient, seeing growth of between 10 and 15 percent per year, driven by population growth and more disposable income among the country’s consumers. Another supporting factor contributing to the strength of the category is the fact that 63 percent of Nigeria’s population, or about 115 million people, are below the age of 25.

Prior to these deals, 8 Miles acquired a minority stake in Biyinzika Poultry International Ltd in June 2014 – a Ugandan agribusiness established in 1990, which has grown to produce 200,000 day old chicks and 150,000 tons of poultry feed from its mill in Katega, Uganda per week.

And in July 2013, the firm led a partnership that fully acquired Awash Wine Share Company in Ethiopia. Established in 1944, Awash produces and provides wine to restaurants, bars, hotels, and supermarkets across the Ethiopian market.

-Lynda Kiernan

Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration please contact Ms. Kiernan at lkiernan@globalaginvesting.com.