Ethiopian PE Firm Cepheus Capital Backs Textile Maker in Third Deal

Ethiopian private equity firm Cepheus Growth Capital Partners has inked its third deal from its debut fund, making an investment in yarn dyed fabric maker JP Textile.

Cepheus, co-led by Kassahun Kebede and Berhane Demissie, is picking up a large minority stake in the textile company, it said Tuesday. It didn’t disclose the amount it invested.

JP Textile is located in Hawassa Industry Park, about 340 km from Addis Ababa, the capital of Ethiopia. It is believed to have been created with Chinese capital a few years ago. It sources threads from China and converts into fabric to be sold to its clients.

Cepheus had floated its maiden fund four years ago, chasing a $100 million corpus to back small and medium sized (SME) companies. It had attracted CDC Group Plc, International Finance Corporation, the European Investment Bank and Norfund, among others, as its Limited Partners (LPs).

The PE firm targets companies primarily in Ethiopia. But according to its website, it will consider strategic investments by Ethiopian companies in the west African countries of Djibouti, Kenya, Tanzania, and Uganda or by regional companies into Ethiopia.

It prefers to back manufacturing companies, though it also seeks investments in agro-processing and service sectors such as education, healthcare, business services, tourism and technology.

Cepheus had struck its debut deal in November 2019 with an investment in Tabor Ceramics, Ethiopia’s leading producer of ceramic products. Tabor Ceramics, also based in Hawassa, had said at the time the PE investment would support a planned expansion and product launch.

One year ago, the PE firm inked its second deal with an investment in Ethiopian FMCG firm Lion Brands, which makes home care, personal care and food products. Lion Brands is part of local conglomerate East African Group PLC, based on the outskirts of Addis Ababa.

Source: The Capital Quest