Proterra Investment Partners-backed Country Bird Holdings (CBH) has acquired a 32.1 percent stake in Johannesburg Stock Exchange-listed Quantum Foods, a feeds and poultry business.
Proterra drew capital from its protein-focused Food Fund strategy to finance the investment, a source familiar with the transaction told Agri Investor. The stake was acquired from Zeder Investments, a Stellenbosch, South Africa-headquartered nvestment holding company focus on agribusiness.
The deal was valued at 308 million rand ($17.6 million; €15.74 million) and follows a restructuring of Quantum after its stake in the business was acquired in 2014, according to a statement from Zeder.
“The rationale for the disposal has less to do with the investment prospects of Quantum Foods, but rather more with the investment objectives of Zeder,” the firm said. “Zeder will use these resources to ensure that its investees are appropriately capitalized during the covid-19 crisis, while also investing in new opportunities, if and when opportune.”
JSE-listed Zeder’s portfolio includes South African inputs supplier Zaad Holdings, Southern Africa-focused ag retailer Kaap Agri and Capespan Group, a fruit producer and marketer headquartered in Cape Town that maintains operations in 12 countries.
Quantum Foods is an integrated animal feed, egg and poultry supplier headquartered in Western Cape, South Africa that was established in 1996. It has units devoted to animal feed, eggs and broiler chicken and operates 12 egg farms and six processing facilities within South Africa. The company’s customers are located throughout Africa and it also has subsidiaries based in Zambia, Uganda and Mozambique.
Proterra-backed CBH is a South Africa-headquartered poultry and animal feed producer founded in 2003. It offers poultry products under the ‘Supreme Poultry’ brand distributed throughout Africa and has operations in Botswana, Nigeria, Mozambique, Swaziland, Zambia and Zimbabwe.
Proterra’s investment into CBH was finalized in 2014 and was the firm’s first in Sub-Saharan Africa, according to the company’s website.
“Since de-listing CBH from the Johannesburg Stock Exchange, Proterra works closely with the company to accelerate the expansion of its already best-in-class geographic footprint into large new markets such as Nigeria and the DRC,” CBH explained on its website.
Investors in CBH also include Synapp International, which the company described as an investment group focused on African poultry, and the International Finance Corporation, the private sector arm of the World Bank.
Poultry meat’s ubiquity and low prices have helped make it the most important protein source for a majority of South Africans, according to a 2019 USDA report. Consumption of chicken meat grew at an average of 7 percent per year during the decade ending 2010, when a slowdown in South Africa’s economic growth began a moderation in the pace of overall meat demand growth, analysts from the Foreign Agricultural Service wrote.
More recently, according to USDA, unfavorable weather conditions have produced higher corn prices that have raised feed costs in South Africa and helped necessitate increased chicken imports from the European Union, Brazil and the US.