ZIMBABWE – Pan-African private equity firm Amethis has struck a new investment by acquiring a minority stake in Avacare Global, a regional distributor and manufacturer of pharmaceuticals and healthcare consumable products.
Amethis’ investment aims to support Avacare in its strategic shift towards manufacturing while continuing to consolidate its positioning in existing and in new markets, and to strengthen governance.
“We strongly believe in Avacare’s strategy to further expand its manufacturing activities in a context where the African continent must build-up and reinforce its production capabilities to address the increasing local demand for medicines,” said Khady Koné-Dicoh, the Amethis partner who led the investment in Avacare.
The company, founded in 1996 by Vikramkumar Naik, has risen to become one of the leading distributors of anti-retroviral (ARV) drugs in southern Africa, home to more than half of the estimated worldwide population living with HIV.
It also sells a portfolio of pharmaceutical products aimed at addressing illnesses such as hypertension, mental health, tuberculosis, diabetes and cancer.
With operations in South Africa, Namibia, Botswana, Zimbabwe, eSwatini, Lesotho, Zambia and Kenya, Avacare sells over 9,000 products, has around 1,300 employees and achieved a turnover of US$200 million in the last financial year. It has 32 warehousing facilities, 47 sales offices and 15 manufacturing facilities across Africa.
This investment comes shortly after Avacare expanded its product range into the fast-growing nutraceutical market in South Africa, Australia, Canada and the US. In addition, it has a presence in the healthcare consumables segment.
“Avacare is well-positioned to tap into the growing healthcare market in Africa, and has demonstrated a strong track record and resilience to economic challenges and the sanitary crisis,” Khady Koné-Dicoh, Amethis’ lead official in the deal said.
According to McKinsey & Copany,the value of Africa’s pharmaceutical industry jumped to US$20.8 billion in 2013 from just US$4.7 billion a decade earlier.
That growth is continuing at a rapid pace and was predicted to be worth US$40 billion to US$65 billion by 2020.
According to McKinsey, Africa may be the only pharmaceutical market where genuinely high growth is still achievable, providing a great opportunity for multinationals and pharmaceutical companies seeking new sources of growth as developed markets stagnate.
Amethis is looking to back the consolidation of the group in South Africa and its geographical expansion in eastern and Francophone Africa, where the fund has a historically large business network and footprint.