Sale of Java coffeehouse wins deal of the year award

The multi-million dollar deal that saw Nairobi Java House sell a majority stake to a US private equity fund has won the Africa Investor (Ai) deal of the year award, in a ceremony that also honoured two Kenyan bank chief executives.

KCB won the Ai bank of the year award, while Equity Bank chief executive James Mwangi scooped Africa’s innovation leader of the year prize.

The awards in 16 different categories were presented at an Ai summit held on the sidelines of the bi-annual IMF World Bank meetings in Tokyo, Japan.

The Java House deal which saw the Washington DC based ECP acquire a majority stake in the Kenyan coffee chain was made public early this year.

(Read: Kenyan companies make billions from PE deals)

The transaction amount was not made public, but ECP managing director, Bryce Fort, said at the time that it fell within the private equity firm’s average deal size of between Sh5.1 billion ($60 million) and $60 million.

“We in ECP are strong believers in Africa’s growing middle class,” said the ECP chief executive Hurley Doddy in a video address to the summit after winning the award.

The Ai Judges looked for “evidence of innovation in the deal structure” when choosing winner of the deal of the year.

Java has more than 13 outlets that are mostly situated in Kenya’s urban, middle income neighbourhoods.

The casual dining restaurant chain was founded 13 years ago by Kevin Ashley and John Wagner, both American citizens.

Its annual turnover has since grown to more than Sh1 billion, reflecting the high growth potential for the sector whose value is estimated at Sh51 billion as per the 2012 Economic Survey report.

Other contestants for the deal of the year award category included private equity firms Citadel Capital and Actis.

Group chief executive of KCB, Martin Oduor-Otieno, attributed the bank of the year award win to the lender’s growth strategy in recent years.

“It’s all down to our performance over the years. Our share price has grown by more than 75 per cent in the past year driven by our financial results and expansion plan,” said Mr Oduor-Otieno in an interview shortly after the award ceremony.

KCB’s profit increased from Sh7.1 billion in 2010 to Sh10.9 billion last year, a performance that saw the bank topple Barclays Bank of Kenya as the country’s most profitable lender

Ai said “in addition to stable growth and performance, the winning bank demonstrates how their banking structure and strategy equips them for future developments in their market.”

Other contestants in the category included Standard Bank, First Rand, DTB, Ecobank and UBA.

Mr Mwangi said the innovation leader of the year award was recognition of the Equity Bank’s strategy of doing things “differently,” such as its aggressive roll out of agency and mobile banking.

“It’s a tribute to the tireless efforts to keep attempting bold ways of doing new things as opposed to keeping to traditions,” said Mr Mwangi.

The award was open to “both African and international companies operating in Africa who have illustrated superb execution of the company’s business strategies.”

Other shortlisted executives for the category included Kenya Airways CEO Titus Naikuni, former Mumias Sugar CEO Evans Kidero, the chief executive of Orascom Telecom Ahmed Abou Doma and the Siemens Africa boss Siegmar Proebstl.

The Ai awards, which were started in 2005, focus mainly on Africa’s investment and business leaders’ success stories.