Mediterrania Capital IV Secures Additional $16.3M from DEG for African Growth

Albert Alsina, MCP Founder & CEO

In a move signaling continued confidence in the growth potential of North and West Africa, German development finance institution DEG (Deutsche Investitions- und Entwicklungsgesellschaft) has significantly increased its commitment to Mediterrania Capital IV (MC IV), a private equity fund managed by Mediterrania Capital Partners (MCP). The firm, chaired by Saâd Bendidi and with Hatim Ben Ahmed as managing partner, has secured an additional €15 million (approximately $16.3 million USD) from DEG, bringing the German investor’s total stake in the fund to €25 million.

This latest investment, announced this week, follows DEG’s initial participation in MC IV in May 2023. The fresh capital injection is earmarked to bolster the fund’s operational reach and support its growing portfolio of investments across the targeted regions. Mediterrania Capital Partners, a prominent private equity firm focused on growth investments in Mediterranean and Sub-Saharan Africa, launched its fourth fund with an ambitious strategy to capitalize on the burgeoning mid-market sector.

MC IV aims to invest in 8 to 10 companies with individual investments ranging between €20 million and €50 million. The fund’s focus lies in acquiring minority stakes in well-established, mid-sized companies with the potential for significant growth and market expansion. Key sectors identified for investment include healthcare, logistics, fast-moving consumer goods (FMCG), education, and financial services. Geographically, the fund intends to allocate 75% of its resources to North Africa and the remaining 25% to Sub-Saharan Africa.

To date, MC IV has already made two significant acquisitions in Morocco. In May 2023, the fund acquired a minority stake in Laprophan, a leading Moroccan pharmaceutical company. This was followed in October 2023 by an investment in Cash Plus, a Moroccan prominent fintech company offering a range of financial services. These initial investments underscore the fund’s commitment to its stated strategy of backing promising businesses in the region.

DEG’s increased financial backing is further complemented by strategic operational support through its subsidiary, DEG Impulse. This initiative will provide hands-on expertise and guidance to the companies within MC IV’s portfolio, aiming to enhance their operational efficiency, sustainability practices, and overall impact. This dual approach of financial investment and strategic support highlights DEG’s commitment to fostering long-term, sustainable growth within the African private equity landscape.

DEG’s initial investment in MC IV in May 2023 was part of a larger €75 million fundraising round for the Laprophan acquisition. This transaction also saw participation from other prominent development finance institutions, including FMO (the Dutch entrepreneurial development bank) and Proparco (the French Development Agency’s private sector arm). The continued support from DEG, and the prior involvement of other DFIs, underscores the growing recognition of the potential within the African private equity market and the strategic role these institutions play in catalyzing economic development.

For Mediterrania Capital Partners, this additional funding from DEG serves as a significant endorsement of its investment strategy and its ability to identify and nurture promising companies in North and West Africa. Under the leadership of Chairman Saâd Bendidi and Managing Partner Hatim Ben Ahmed, the firm is well-positioned to leverage this increased capital to further expand its portfolio and contribute to the economic growth of the region. As MC IV continues to deploy capital and support its portfolio companies, its activities will be closely watched as a barometer for the health and dynamism of the African private equity sector.

Source: Launch Base Africa