UAE-based private equity firm Abraaj Group has bought a stake in La Flèche Bleue Algérienne SPA (FBA), a company specialising in logistics and transportation services in Algeria.
The investment firm did not disclose the value of the deal or the size of the stake it acquired in FBA.
Abraaj’s investment is expected to help FBA expand into other logistics verticals and will provide the company with the necessary funds and resources to grow its market share in Algeria, the private equity firm said.
Following the deal, FBA’s growth strategy will focus on expanding its general capacity, developing more logistics services, strengthening corporate governance standards and implementing a fully integrated reporting system.
Abraaj will also bring its previous expertise in investing in logistics firms such as Aramex, ARG in Mexico, Rentandes in Colombia, and Crossland Logistics in South East Asia along with the company’s strong network in the Middle East.
FBA began operations in 2004, servicing companies and transporting merchandise for various sectors including agribusiness, FMCG, the beverage industry, and construction materials.
It is the largest company offering logistic services in Algeria and operates through long-term contracts with global clients.
“FBA is our inaugural investment in Algeria and we are excited about entering Africa’s largest country by area and unlocking the immense local potential that exists in the country,” said Ahmed Badreldin, partner and head of MENA at The Abraaj Group.
“The key opportunity for the logistics sector in Algeria is intrinsically linked to the underlying growth of the industries that it services. From agribusiness to FMCG, many of FBA’s clients are representative of the best-performing sectors in the country and display double-digit annual growth rates.
“This creates a long-term requirement for a strong logistics offering to complement the fast growth of Algeria’s economy and the rapid rise of its middle and consumer class.”
Abraaj, which has about $7.5 billion in global assets under management, announced six deals during the first half of 2014.
It has been particularly active in the latter part of the year buying stakes in South Africa-based food manufacturer Liberty Star Consumer Holdings (Libstar) and in the Southeast Asian food and drink chain Wine Connection.
Currently, it is engaged in a bidding war with cereal maker Kellogg Co for a 51 per cent stake in Egypt-based food company Bisco Misr.