RMBVenturesbacksbioscience

 

The challenge

Afrikelp is a South African bio-stimulants company that specialises in the production of high-quality seaweed extracts from the giant brown seaweed – ecklonia maxima. AfriKelp uses the seaweed to produce a liquid seaweed extract that stimulates growth and strengthens green plants. The bio-stimulant helps plants extract nutrients from the soil more efficiently, supports natural root development and growth, while improving water efficiency.
While Afrikelp offers a unique product in the market – the ecklonia maxima seaweed only grows on the West coast of South Africa, it required additional capital to grow and expand its unique bio-stimulant products across the world. The management team of Afrikelp furthermore expressed the need to gain a greater shareholding in their business, that was at the time, owned by South African health and wellness group, Ascendis Health.

The RMB solution

RMB Ventures, along with a consortium and the management team of Afrikelp, provided the financial and technical expertise to enable Afrikelp management to buy their business from existing shareholders. The sale formed part of Ascendis Health’s divestment of non-core assets and businesses, including Efekto and Marltons, announced in September 2018.

The RMB Ventures team realised Afrikelp’s unique and attractive offering in the market, along with is strong management team, growth prospects and cultural fit – making it the ideal investment partner.

While RMB Ventures is not involved in the operational side of the business, it brings significant value in backing Afrikelp’s management team with strategic advice, experience across multiple industries and support from the FirstRand Group.

As a result of the MBO, Afrikelp is now in a position to further expand internationally, while yielding returns to the owners.

Partner	AFRIKELP
Deal value	R480-million
Sector	Agriculture
RMB Ventures’ role	Management buy-out