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Actis, a private equity firm based in the UK, is reportedly looking to sell their full stake in Java House, a popular restaurant chain in Kenya.
While the details of the sale are not disclosed, it is believed that the worth of the transaction is in the billions.
Sources claim that Actis has been seeking a buyer for Java House since 2022.
According to sources who spoke to Business Daily, the goal is to find a buyer for the chain by the end of this year.
However, a representative from Actis has declined to comment on the financial details of the transaction, stating that it is speculation.
Expansion of restaurant chains
Java House, established in 1999, is the largest restaurant chain in East Africa, with 72 outlets.
It is followed by Chicken Inn, Artcaffe, KFC, and Burger King. The chain plans to increase its number of outlets in Kenya and expand beyond East Africa.
In addition to Kenya, the chain currently operates in Uganda and Rwanda, and has previously sought to expand to Dar es Salaam, Lagos, Accra, and Lusaka.
The restaurant industry in Kenya has seen significant growth in recent years, driven by rising disposable household incomes, fast economic growth, and a young population.
This has attracted global players such as KFC, Subway, Burger King, Cold Stone Creamery, Toridoll, and Domino's Pizza to open more stores in Kenya.
However, local chains, such as ArtCaffe, are expanding rapidly and taking a portion of Java House's market share.
However, the sale is expected to strengthen Kenya's reputation as a high-return market for private equity and development finance institutions.
This is seen in the fact that most private equity funds and DFIs have exited the Kenyan market by selling to similar funds, indicating a strong demand from institutional investors such as wealthy families, pension funds, and governments.
The Kenyan restaurant industry is growing and attractive to global players, making the sale of Java House a potentially profitable move for Actis and the new buyer.