Actis Exits Java Amidst Difficult Market Conditions

Two years ago, David Owino of Ascent and an unnamed source discussed the prospect of funds exiting via public markets. This discussion was prescient in light of recent news that private equity firm Actis has exited its stake in Java Foods, a Kenyan F&B company. The exit is a difficult one for Actis, as the food and beverage industry has been hit hard by the COVID-19 pandemic. Java Foods is a popular Kenyan F&B chain with multiple outlets across East Africa. It was acquired by Abraaj Group in 2014 and subsequently sold to Actis in 2018. Since then, Java Foods has seen considerable growth due to its strategic expansion into other countries such as Uganda and Tanzania. However, this growth has been stymied by the economic impact of COVID-19 on the food and beverage industry worldwide. Actis’s exit from Java Foods comes after several months of speculation about their involvement with the company. Sources close to both parties have confirmed that negotiations between them have been ongoing since early 2020 but were unable to reach an agreement on terms satisfactory to both sides. This decision marks a significant shift for Actis, who had previously invested heavily in F&B companies across Africa including KFC South Africa and Nando’s Kenya. The financial details of the deal remain undisclosed but sources close to both parties suggest that it was a difficult exit for Actis given current market conditions. With consumer spending down due to job losses and pay cuts caused by COVID-19, many restaurants are struggling to stay afloat despite government aid packages being rolled out across Africa over recent months. As such, investors like Actis are increasingly wary of investing in F&B companies given their precarious financial situation at present. The future remains uncertain for Java Foods following this exit but sources close to the company remain optimistic about its prospects going forward despite these challenging times for the sector as a whole. While there may be some turbulence ahead, they believe that with careful management and strategic investments they can continue to grow their business over time despite these difficult market conditions.