Fanisi Capital acquires $3m stake in Nairobi drugs chain

Kenya-based investment fund, Fanisi Capital, has made its first investment in the local pharmaceutical sector with a Sh262 million ($3 million) acquisition of a stake in retail pharmacy chain Haltons Limited.

Fanisi Capital CEO Ayisi Makatiani said the decision to invest in Haltons was informed by the latter’s experience in the pharmaceutical industry, especially in procurement of drugs.

“This is an investment on the retail side of the pharmaceutical business as opposed to the wholesale business investment we made in Rwanda. Our plan is to invest in the areas of healthcare, mining, light manufacturing and education,” said Mr Makatiani.

Haltons operates four retail outlets within Nairobi, with plans to open outlets in other towns in Kenya, including Mombasa, Nakuru, Nyeri, Eldoret and Kisumu over the next two years.

Mr Makatiani said the investment will give Haltons financial muscle to expand its business, at a time many investors are looking to get into the pharmaceutical industry. He did not disclose the size of the stake that the investment fund has acquired in the pharmaceutical firm.

Another portfolio

Haltons Limited chief executive Louis Machogu said the investment from Fanisi Capital will help fund its expansion plans. The investment in Haltons Limited brings to five the investment deals that Fanisi Capital has made in the region since 2010.

This is its second investment in the regional pharmaceutical industry, following an equity investment into Rwanda-based pharmaceutical wholesaler Sophar Limited in January, which was valued at nearly $3 million (Sh262 million). The company imports branded drugs, mostly from Europe.

Fanisi Capital’s investment strategy caps the maximum investment in a single firm to $3 million.

Sophar said in a statement after the deal went through that it would use the funds to increase its product range to 900 drugs from 300, build a warehouse that meets WHO standards in Kigali and set up distribution centres.

With the Haltons acquisition, Fanisi has added yet another investment into its Kenyan portfolio, following the 2011 acquisition of Hillcrest International Schools which were previously owned by Kenneth Matiba.

This year, Fanisi Capital also invested another $3 million (Sh251 million) through a mix of equity and debt in another Rwandese firm, the agribusiness company ProDev Group Holdings, getting a minority stake and board representation.

ProDev, through a subsidiary Minimex Ltd, processes maize into branded flour, grit for brewers.