8 Miles, the UK-based private equity fund, has sold its entire stake in Biyinzika Poultry International Limited to a consortium that includes an American company and a “regional industry executive” in an effort to monetise its investments and return money to investors as the fund draws to a close.
The fund’s initial investment in the company, a “Ugandan market leader in the production and sale of poultry day-old chicks and specialised poultry feed,” was made in 2014. It became the majority shareholder in May 2015.
However, in a filing with the UK government registrar of companies last month, 8 Miles said it had “continued its focus on exiting its remaining portfolio companies” in the year to March, and was “in the process of selling the remaining three portfolio companies with the aim to complete these sales over the next 6 months.” It added that the terms of an extension agreement with investors set its termination date at 30 January 2024.
The fund, its two subsidiaries and its investment vehicles — one subsidiary is registered in Mauritius, as are its two investment vehicles — reported a net loss of $1.2mn for the year ended March 2023, down from a profit of $0.4mn the previous year, due to a decline in management fees caused by “declining valuations of portfolio companies, particularly investments written down below cost due to calculation mechanics.”
Verdant Capital, which advised and announced the transaction on Thursday, did not disclose the terms of the deal.
Established in 1990 as a poultry breeder, Biyinzika is one of Uganda’s leading suppliers of day-old chicks, poultry feeds, broilers and dressed chicken. Its brands include Pearl Chicken and Biyinzika Feeds.
The founding family of Biyinzika continued to run a similar business under a similar name, even after selling to 8 Miles. Recently, however, it was in the news for defaulting on bank loans that could see it lose most of its assets.
8 Miles’ previous investments in Uganda include Orient Bank, in which it bought a 42 per cent stake from Nigeria’s state-owned Keystone Bank in 2015. It exited the bank in 2021, selling to Kenya’s I&M Holdings Plc, which became majority owner after buying out other shareholders. The bank was renamed I&M Bank Uganda later that year.
The fund has always identified itself as a “pan-African private equity firm.” Its primary focus was “to invest predominantly in operating companies and assets situated or having substantial operations in Africa, with the principal objective of creating capital growth and realising gains.” In addition to Uganda, it also invested in companies in Ethiopia, Nigeria, and Ghana.
8 Miles secured investment from the International Finance Corporation, the private sector arm of the World Bank, the CDC Group, the UK’s development finance institution (currently known as British International Investment), and the African Development Bank.
It has always attracted attention because of its chairperson and early investor, Bob Gedolf, who was a famous singer in the UK in the 1970s. In 2019, 8 Miles was accused of using its subsidiaries in Mauritius — a tax haven — to avoid taxes in places like Uganda (a perfectly legal thing to do).
