SPE Capital successfully completes a dividend recapitalization, partial exit and capital increase in relation to its investment in Sotipapier SPE Capital (“SPE”), an Africa-focused private equity firm, announced today the completion of a multi-faceted transaction in relation…
SPE Capital (“SPE”), an Africa-focused private equity firm, announced today the completion of a multi-faceted transaction in relation to its investment in Sotipapier, which ranks among the leading producers of paper for industrial use in North Africa.
SPE acquired a majority stake in Sotipapier in 2012, in a leveraged transaction, through its Intaj II Fund (“Intaj II”), amidst a challenging political, social and economic environment in Tunisia. Since then, the management team brought onboard by SPE embarked on a transformational plan for the company, focused on institutionalizing the company, increasing production capacity, improving product quality and enhancing productivity. In 2014, SPE realized a partial exit from Sotipapier through the listing of the company on the Tunis Stock exchange, a listing which was oversubscribed nearly 10 times, at a valuation which yielded an IRR of over 60% and a MoC of 3x (in USD).
In early 2017, SPE embarked on an ambitious transaction, composed of (i) a dividend recapitalization of the stake in Sotipapier, (ii) a partial exit for Intaj II and (iii) a syndication of local institutional investors to participate in a capital increase. This transaction has resulted in an incremental distribution to investors in Intaj II and provides capital for Sotipapier to drive further growth. Looking forward, Sotipapier will seek to consolidate its leadership position in its local market, build a premier wastepaper collection and recycling business and develop export markets for the company, mainly across North Africa and select countries in Sub-Saharan Africa.
Commenting on the transaction, Nabil Triki, Managing Partner at SPE and Chairman of Sotipapier, said: “the continued success of this investment confirms our view that, in the challenging environment that prevails in North Africa, compelling investment opportunities exist for local private equity investors with deep-rooted insights into the region, who can structure transactions in a manner which safeguards the returns and protects the downside”.
Nabil added: “this transaction, which has involved the use of acquisition debt, a listing on the local stock exchange and the successful execution of a dividend recapitalization, is a testament to the fact that, in markets such as Tunisia, investors can structure complex private equity transactions which yield attractive returns. Despite a devaluation of the Tunisian Dinar of nearly 40% since 2012, creative structuring of the transaction from the outset, combined with incremental realizations through the life of the investment, have enabled us to achieve a cumulative IRR of 22% and a MoC exceeding 2x, both in USD. Through our investment in Sotipapier, we have also been able to attract local retail and institutional investors, through the listing in 2014 and the capital increase we just completed”.
About SPE Capital
SPE Capital is a private equity firm formed in 2016 from a spinout from Swicorp, a leading regional investment banking firm. SPE Capital is led by an experienced investment team, with a combined experience of more than 60 years investing in growth companies and an objective to achieve superior investment returns for investors.