US firm buys controlling stake in Kenyan coffee house JavaBy WANGUI MAINA for the Business Daily | Monday, May 28 2012 at 16:27
An American private equity firm has bought a majority stake in Nairobi Java House, marking a significant milestone for the 13-year old coffee chain that is set to expand to neighbouring countries.
The managing director of Emerging Capital Partners (ECP), Alex-Handrah Aimé, said in an interview with the Business Daily that the new capital will be used to finance Java's local and regional expansion.
She declined, however, to disclose the transaction price.
Java’s managing director, Kevin Ashley, said the business has recorded an annual growth of between 30 per cent and 40 per cent in the past five years, with turnover touching Sh1 billion ($11.75m) in the year ended June 2011.
“East Africa is a diverse economy, with the middle class mainly pushing its growth and they have needs that have yet to be met,” said Ms Aimé.
Being a private company, Java is not obligated to publish its financial statements.
The private equity is opening an office in Nairobi to oversee its interests in the region.
The growing middle class in East Africa makes the region attractive to the equity firm, which is looking for more investments in the region.
ECP negotiations with Java started a year ago.
From a one coffee shop in Adams Arcade 13 years ago, Java House has grown to be one of the leading coffee shops in the country with 13 branches, the most recent opening its doors last week.
It was founded by Mr Ashley and John Wagner, both American citizens. It has also opened three planet Yoghurt outlets, which mainly sell yoghurt.
So far the chain has funded its expansion using internal revenues.
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