Abraaj scoops up African coffee chain Java House

Dubai firm jumps into Kenyan coffee

Arif Naqvi, the chief executive of Abraaj Capital. The company has acquired the African coffe-hgouse chain Java House. Sarah Dea : The National

Abraaj Group will acquire Kenya’s Java House Group to help the coffee chain in its expansion efforts to more than double in size across East Africa.

The Dubai-based private equity investor announced on Monday it will fully acquire Java House from Emerging Capital Partners (ECP) for an undisclosed amount. The acquisition adds to Abraaj’s African portfolio, which totals US$3.2 billion.

Mustafa Abdel-Wadood, a managing partner and the global head of private equity at Abraaj, said the deal was an opportunity to increase assets across one of its core markets.  “Africa’s rapidly expanding middle class, sustained population growth and increasing urbanisation is creating compelling investment opportunities in multiple sectors, and we believe Java House is ideally positioned to benefit from these trends,” he said.

Abraaj will help Java House to accelerate its next phase of growth, said the Java House chief executive, Ken Kuguru. The restaurant group has 60 outlets across 10 cities across East Africa, including the coffee-led cafe Java House, Planet Yogurt and 360 Degrees Artisan Pizza. The group is looking to increase to 150 stores while hiring up to 40 per cent more workers annually.

In addition, the company operates commercial coffee roasteries, which sell coffee beans spanning from supermarkets and hotels to wholesale buyers. And that market is expected to become more profitable as the commodity’s futures for 2019 are selling nearly 20 per cent higher than today’s market price, according to the International Commodities Exchange.

“Abraaj is taking over the reins of a powerhouse African brand at an exciting time in its growth trajectory with enormous potential to further expand a successful formula across the continent,” said Bryce Fort, a founding partner of ECP.

The transaction will close once customary closing conditions and regulatory approvals are obtained.