TURKEY: Dubai PE firm Abraaj partners EBRD to buy stake in Turkish dairy Yorsan
Abraaj has acquired a share in Turkish dairy firm Yorsan
Dubai private-equity group Abraaj in partnership with the European Bank for Reconstruction and Development (‘EBRD’) and the Yörük family, has announced the acquisition of a majority stake in Turkish dairy products company Yorsan Group.
Yörsan has been manufacturing dairy products in Turkey for over 50 years and its portfolio of products includes yoghurt, cheese, milk and the traditional Turkish drink ayran.
The dairy industry in Turkey is estimated to be TRY6.5bn (US$2.89bn). According to Abraaj, there is significant opportunity for growth in the sector as consumption volumes per capita are still around a third the level of developed markets.
Abraaj hopes to use its expertise to bring Yörsan to the next level of growth, both inside and outside of Turkey.
Omar Syed, MD at Abraaj, said: "Yörsan is a long established and respected brand in the Turkish dairy sector. We believe the company has great potential to quickly become the market leader in the higher value dairy segment. The combination of Abraaj's unique value creation focus, our global experience in the dairy industry and the strength of the company's management team will realise our ambition of transforming Yörsan from a highly successful family-run Turkish dairy business into a world class FMCG player. To this end, partnering with EBRD is a strong value added aspect which provides us access and insight to the Balkans and CIS region."
Istanbul, Turkey, 21 January 2014: The Abraaj Group (‘Abraaj’ or ‘The Group’), a leading investor operating in global growth markets, today announced an agreement to acquire through its Fund a majority stake in Yörsan Group (‘Yörsan’), a market leading Turkish manufacturer and distributor of high quality, dairy products, in partnership with the European Bank for Reconstruction and Development (‘EBRD’) and the Yörük family.
Yörsan has been manufacturing branded dairy products in Turkey for over 50 years, during which time it has built high brand recognition and loyalty and has a market leading position in the higher value dairy segments. Yörsan has a strong portfolio of products covering all the main dairy categories of yoghurt, cheese, milk and the traditional Turkish drink - ayran. Yörsan’s dedication to high quality products, its modern production facility in Susurluk and its pan-national distribution network makes it one of the best positioned dairy manufacturers in the fast growing Turkish dairy industry.
The dairy sector in Turkey is estimated to be currently TL6.5 billion in size and has grown even during economically challenging years such as 2009 which highlights the industry’s defensiveness. Growth in the Turkish dairy industry is driven by a number of attractive characteristics. These include the continued conversion from open to packaged products due to rising urbanization and an increasing share of organized retail which currently stands at 50% of the market in terms of volume. Also, Turkish income per capita levels, which have doubled over the last decade, are expected to do so again in the next 10 years. Turkey’s dairy sector demonstrates ample room for growth considering dairy consumption volumes per capita are still low at approximately 1/3 the levels of more developed markets.
Working alongside a new and seasoned leadership team, Abraaj will use its significant investment expertise and track record in the dairy industry as well as its strong networks across growth markets to transition Yörsan onto its next phase of growth both inside and outside of Turkey.
In what was the largest private equity FMCG transaction in Sub Saharan Africa, outside of South Africa, Abraaj recently acquired a majority stake in Fan Milk, a leading manufacturer and distributor of frozen dairy products and juices in West Africa. Abraaj also has ownership in Brookside Dairy, which is the largest dairy in East Africa. These previous investments, coupled with EBRD’s experience and portfolio in Eastern Europe and CIS countries, will provide Yörsan’s management with access to a global network and deep sector knowledge.
Selçuk Yorgancioglu, Partner and Regional Head of Turkey and Central Asia at Abraaj, said: “The acquisition of Yörsan marks our 8th investment in Turkey since 2007. We feel privileged to be partnering with EBRD and the Yörük family on the acquisition of this much loved and iconic Turkish brand. Abraaj has a highly successful track record in Turkey underpinned by proven investment partnerships, landmark exits and a strong commitment to this vibrant country. Our investment pipeline in Turkey remains robust, with the long-term prospects for the Turkish economy continuing to look extremely good.”
Omar Syed, Managing Director at Abraaj, said: “Yörsan is a long established and respected brand in the Turkish dairy sector. We believe the company has great potential to quickly become the market leader in the higher value dairy segment. The combination of Abraaj’s unique value creation focus, our global experience in the dairy industry and the strength of the company’s management team will realize our ambition of transforming Yörsan from a highly successful family run Turkish dairy business into a world class FMCG player. To this end, partnering with EBRD is a strong value added aspect which provides us access and insight to the Balkans and CIS region."
Alain Pilloux, Managing Director at EBRD said: “The EBRD is pleased to partner with The Abraaj Group in this exciting opportunity in the dynamic Turkish dairy sector. This marks the EBRD’s first co-investment with The Abraaj Group, and we look forward to working together in the future, both in Turkey and in other regions.”
On this transaction, Türkiye Garanti Bankasi A.S. and Yapi Kredi have provided acquisition financing and acted as joint Mandated Lead Arranger; Esin Attorney Partnership (a member firm of Baker & McKenzie International), Baker & McKenzie and Freshfields Bruckhaus Deringer LLP have acted as legal counsel, 3 Seas Capital Partners has provided buy side advisory services
Original source: Abraaj
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