Nairobi-based private equity firm Catalyst Principal Partners has acquired Kenyan top tier mattresses manufacturer Superfoam.
The acquisition, which is undergoing regulatory scrutiny from the Comesa Competition Commission, has also seen the firm buy Uganda mattresses maker Euroflex Limited and Malawian mattresses manufacturer Vitafoam for an undisclosed amount.
The deal will see the establishment of Catalyst Mattress Africa (CMA) from merging the three firms through a new vehicle called Mammoth Foam Africa where the PE fund has a stake.
“The Comesa Competition Commission after receiving a notification in terms of Article 24 of the Regulations regarding the proposed merger involving Catalyst Mattress Africa Ltd and Mammoth Foam Africa intends to embark on an inquiry in terms of Article 26 of the regulations,” said the regional competition watchdog in a regulatory notice.
“The parties have submitted that the notified transaction entails the amalgamation of three entities (Super Foam Limited, Euroflex Limited, and Vitafoam (A) Limited) under a holding company, Mammoth, who will subsequently issue shares to CMA.”
The family-owned Superfoam was started in 1983 by brothers Himat Devchand Dodhia and Dilip D. Shah.
Based in Ruiru, the company produces standard mattresses but also specialised orthopaedic ones for people with back problems.
“The Commission will, in accordance with the provisions of the Regulations, determine among other things whether or not the merger is likely to substantially prevent or lessen competition within the Common market and whether the merger is or would be contrary to the public interest as provided for under Article 26 of the Regulations,” the regional regulator said of the deal.
Last May, Catalyst acquired Jambo Biscuits - makers of Britania brand - for an undisclosed sum, saying it spent part of a Sh10.6 billion kitty raised from its last cash call.
It held stakes in Chai Bora (Tanzania), ChemiCotex (Tanzania), Effco Solutions (Tanzania), Zenufa Laboratories (Tanzania), Jamii Bora Bank (Kenya), Orbit Chemical Industries (Kenya) and Yes Brands (Ethiopia) as at May last year.
The PE firm's investors include development finance institutions, wealthy families and organisations seeking alternative investment ventures outside of conventional equity markets.
Early this year Catalyst received a capital injection of $15 million (about Sh1.55 billion) from the African Development Bank (AfDB).
AfDB said at the time that the East Africa-focused fund - which is the second by Catalyst Principal Partners - would make acquisitions in the local mid-market segment across sectors focusing mainly on priority consumer staples, financial services, industrials and healthcare.
Catalyst’s initial capital of $123 million (Sh12.6 billion) has been invested in nine companies in the region.
Catalyst Fund II aims at netting $175 million (about Sh18 billion) to be invested in low-income countries in eastern Africa.
