Agthia Group to acquire majority stake in Egypt’s Abu Auf Holdings

The spate of acquisitions of Egyptian businesses by their counterparts in the UAE continues unabated.

The UAE-based food and beverages company Agthia Group has announced that its Board of Directors has approved a strategic acquisition of 60% of Abu Auf Holdings Group, a specialised healthy snacks, coffee manufacturer and retailer in Egypt.

Established in 2010, Auf Group processes, manufactures, retails and distributes a broad portfolio of products across Egypt including coffee, nuts, healthy snacks and other confectionery products sold under the ‘Abu Auf’ masterbrand.

The transaction provides Agthia with a footprint in the attractive Egyptian snacking market and, together with last year’s acquisition of leading processed meat producer Atyab, facilitates the establishment of Agthia as a major player in the Egyptian consumer packaged goods industry.

The acquisition also reflects Agthia’s ongoing commitment to strengthening its portfolio and diversification into branded consumer goods. It will build on last year’s acquisitions of the GCC’s leading innovative healthy snacks and food company, BMB Group, and the Al Foah dates business, strengthening Agthia’s market, category and channel portfolio.

Expanding Footprint

Khalifa Sultan Al Suwaidi, Chairman of Agthia Group, said: “As part of our strategy to stimulate growth and enhance our operations, we are focused on expanding Agthia’s footprint in the MENAP region.”

“The acquisition of Auf Group is a compelling opportunity to bolster our delivery of this commitment, while further penetrating one of the region’s fastest-growing consumer markets. Following a record first quarter in 2022, we believe that Auf Group will accelerate Agthia’s strong growth trajectory both now and in the future,” he said.

Alan Smith, CEO of Agthia Group, said: “Auf Group is an important strategic target for Agthia to boost growth in our snacking and healthy food verticals, as we continue to adopt a more consumer-centric business model. In addition to immediate access to new revenue streams and product lines, we are excited to expand our presence in Egypt and utilize the acquisitions made last year to further strengthen our operations and market revenue base.”

Distinguished Brand

Ahmed Auf, CEO of Auf Group, said: “Auf Group has grown substantially in Egypt since its foundation in 2010, with consistent investment in corporate infrastructure and human capital enabling us to build a distinguished brand and remain at the forefront of the local healthy snacks market.

“Following our partnership with an institutional investor in 2019 to further accelerate growth and institutionalize the company, we believe we are now ready for the next step in our journey. We would like to thank our employees, customers and suppliers for their continued support and are excited by the prospect of partnering with Agthia to expand our reach, realize our potential and grow our footprint in the UAE and beyond,” he added.

During the Last Twelve Months (LTM) period ending 31 December 2021, Auf Group generated total net revenue of around $64.25 million and EBITDA of approximately $15.79 million, with healthy EBITDA margins of 25%.

The transaction will see Agthia acquire 60% of Auf Group, while Auf Group’s founders will retain a combined stake of 30% in the business and continue to lead the company with the full backing of Agthia’s regional footprint and operational support.

Tanmiya Capital Ventures, an Egyptian private equity firm which invested in Auf Group in 2019, also remains a committed shareholder with a 10% stake. The acquisition is subject to satisfying customary closing conditions, including obtaining relevant regulatory approvals.