The FINANCIAL -- The EBRD is supporting small and medium-sized businesses in Egypt, Morocco and Tunisia with a €15 million equity investment in the first close of Mediterrania Capital III LP (MC III), which could increase up to €35 million in subsequent closings.
This is the third fund of Mediterrania Capital Partners, a regional private equity firm focused on growth investments supporting small and medium-sized enterprises (SMEs) in North Africa and sub-Saharan countries. The EBRD funds will allow Mediterrania Capital to make equity and quasi-equity investments in SMEs in Egypt, Morocco and Tunisia to boost their competitiveness.
It follows a previous €20 million EBRD investment in the second fund of Mediterrania Capital Partners, MC II, to support SMEs in North Africa, according to the EBRD.
Albert Alsina, Founder and CEO of Mediterrania Capital Partners, said: “The EBRD’s continued support is crucial to achieving our plans for expansion into Egypt. The EBRD’s values of building market economies through businesses that are competitive, green, inclusive, resilient and well-governed are fully aligned with our goals as a private equity firm that seeks to deliver high returns to our investors and partners while helping SMEs grow and set the right foundations for the future.”
EBRD President Sir Suma Chakrabarti added: “Through our investments, we aim to help businesses flourish, promoting innovation, growth and transparency, and ultimately improve the quality of people’s lives. We are very pleased to partner with Mediterrania Capital Partners once again. With their high ethical standards and strong transactional and operational experience in private equity, they continue to be a critical partner for us.”
Mediterrania Capital Partners invests in economies that benefit from pro-business policies, favourable demographics, a growing middle class with increased purchasing power and rapid urbanisation trends.
Maintaining the strategy set by the two previous funds, MC III will continue to target core industries such as education, healthcare, finance, retail, telecommunications as well as transport and logistics.
Through the MC I and MC II funds, to date Mediterrania Capital Partners has invested in 17 companies in North Africa, which currently account for €1 billion in annual revenues and 7,000 employees combined. Over the last 10 years, the firm focused on capital growth markets in North Africa such as Algeria, Morocco and Tunisia and is now expanding into Egypt and selected francophone sub-Saharan countries.
In support of its country expansion plans, Mediterrania Capital is opening a new office in Cairo under the management of Khaled Saba, Senior Country Advisor for Egypt.
Across all its investments, Mediterrania Capital Partners takes a highly proactive, hands-on approach to implementing the growth strategy of the portfolio companies while leading the governance processes. This approach enables portfolio companies to deliver higher-than-average EBITDA and revenue growth rates and enhance their environmental, social and corporate governance best practices.
MC III’s operations are scheduled to commence at the end of November with €100 million at first close. Final closing is scheduled for July 2018 with a target of €250 million.
The EBRD launched its operations in the southern and eastern Mediterranean region (SEMED) region in 2012, and to date the Bank has committed nearly €6 billion across 148 projects in various economic sectors.