Phatisa acquires South African vaccine provider Deltamune

Senior partner Rinolan Moodley says future expansion into adjacent markets like fermented coffee, textiles and pure protein could eventually help attract multinationals to the business.

Phatisa has acquired South African vaccine manufacturer Deltamune with plans for expansion into new regions and product categories.

The Mauritius-headquartered asset manager acquired Deltamune from South Africa-headquartered HL Hall & Sons Investments for an undisclosed sum.

Established in 1995, Deltamune develops and manufactures vaccines used in production animals for the food market, with a particular focus on poultry. The South African biotechnology company produces both registered vaccines like those for avian influenza, anthrax and salmonella, as well as autogenous vaccines created for local African diseases.

Phatisa partner Rinolan Moodley told Agri Investor the firm was introduced to Deltamune through an advisory it worked with on another deal. He explained that in addition to the company’s commercial prospects, Phatisa was attracted to Deltamune in part for its potential to support African producers.

“Multinationals tend to focus much more on international diseases where they can mass produce and export across the world. What Deltamune has found a very successful niche in doing is in these local autogenous vaccines, which are very much local viruses and local strains,” he said. “Multinationals don’t focus on that, so they are very much fulfilling a key responsibility to their local commercial farmers.”

Deltamune will work with local vaccine banks, Moodley explained, to ensure an ability to mass-produce vaccines for any of the diseases the company works on, should that become necessary.

Moodley said in addition to expansion from poultry into cattle and sheep, Delatmune has aspirations for international growth. Countries within the South African Development Community such as Botswana, Mozambique and Namibia are likely to be an early focus. He added that Deltamune hopes to eventually expand into East African markets of Kenya, Uganda and Tanzania, where Rift Valley Disease has been a challenge in recent years.

Plans to grow the business over the next four to six years, he added, also call for efforts to build on potential “cross-pollination” between Detamune’s core capabilities in growing and modifying organisms, and adjacent markets including fermented coffee, textiles and pure protein.

“Once we are hopefully able to commercialize all of these different avenues within the business and their core skillsets, I do think we will attract the interest of multinationals for that reason,” he added.

Capital for Phatisa’s investment came from its Food Fund II, which closed on $143 million in early 2021 after securing commitments that included several development finance institutions and some commercial investors. Phatisa founding partner Stuart Bradley told Agri Investor the firm always targets a combination of commercial and impact objectives in its investments.

Given the potential impact of local disease on the prospects of commercial and smallholder farmers alike, he said, Phatisa’s Deltamune investment can play a key role in helping support regional food security.

“Bird flu is raging around Africa again. We know of farms up in West Africa that have been wiped out and lost their flocks. This very much plays into that, in terms of both commercial [significance] and impact,” he said. “If we didn’t stop these diseases and do something about it, then livestock in Africa is doomed.”