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Update: Fairfax Africa pays $72 million for South African agri company – exclusive

The subsidiary of Canadian financial holding company Fairfax Financial Holdings Limited completed its IPO and acquired an indirect 42.2 percent interest in AFGRI, a South African agricultural services and food processing company.

Fairfax Africa Holdings Corporation paid roughly $72 million for its indirect 42.2 percent interest in AFGRI, a leading South African agricultural services and food processing company, Agri Investor has learned.

Fairfax Africa, a new holding company and subsidiary to Canadian financial holding company Fairfax Financial Holdings Limited, announced this week that it completed its initial public offering, generating gross proceeds totaling approximately $500 million to invest in public and private equity securities and debt instruments of African businesses.

With roughly $430 million in hand following the AFGRI acquisition, the company will seek to acquire controlling stakes throughout the continent, with plans to invest roughly one-quarter to one-third of that into food and agriculture, sources told Agri Investor.

AFGRI supplies a range of mechanized equipment for commercial farmers and provides farming inputs, building materials, handling and storage, among other products and services, with a core focus on grain commodities.

Fairfax Africa completed its IPO of 5,622,000 subordinate voting shares at a price of $10 per share, for gross proceeds of $56,220,000; issued 22,715,394 multiple voting shares on a private placement basis to Fairfax Financial affiliates in exchange for $227,153,940; and issued 14,378,000 shares, on a private placement basis, to certain cornerstone investors for $144 million. The shares began trading on the Toronto Stock Exchange under the symbol “FAH.U” on Friday.

The company did not immediately respond to requests for additional comment.

Update: This article was updated on 24 February to reflect the purchase price of AFGRI. The original article was published on 21 February.