Cauris private equity books into West Africa hotel growth

A West Africa private equity fund, Fonds Cauris Croissance II, says it will invest 4 billion FCFA (XOF, equivalent to $8 million) in Azalaï Hotels to fund an ambitious expansion programme in the region. The investee company, Azalaï Hotels (www.azalaihotels.com), operates 6 hotels in Benin, Burkina Faso, Guinea Bissau and Mali and is expanding into new countries, including Côte d’Ivoire, Guinea Conakry and Senegal.
Azalaï Hotels is to start building a hotel in Côte d’Ivoire in January 2013 and plans to open late in 2014. The company began operating in 1994 in Mali and has expanded its presence into 4 countries through opening or acquiring 3- to 5-star hotels, according to a press release.
Fonds Cauris Croissance is managed by West African fund manager, Cauris Management (www.caurismanagement.com).
Cauris Investment, the first fund managed by the same manager, previously invested with the Azalaï Hotels group in 1998 to finance the construction of a hotel in Mali and the first regional expansion. Cauris Investment exited in 2006.
Commenting on this new investment, Mr. Mossadeck Bally, founder and CEO of Azalaï Hotels said: “The partnership between Cauris and Azalaï Hotels is a sign of mutual respect between our institutions. Cauris is the private equity institution that best understands the specificities of local entrepreneurs while following its own requirements for commercial returns. After a first mutually beneficial partnership, it is with pleasure that we will enjoy again Cauris’ experience both in hotels and in other sectors.” Azalaï Hotels says it is the first locally owned hotel chain in West Africa to offer services at international standards.
Noel Yawo Eklo, CEO of Cauris Management, said in the press release: “After a first positive experience, we think it is important to support Azalai Hotels in its development programme, especially now that it is about completing the regional mapping and strengthening the profitability of a group composed of very seasoned professionals. The hospitality sector is a difficult one to operate in globally, but it is rewarding as it also creates much-needed jobs”.
Private equity fund manager Cauris Management has been active in West Africa, mainly the francophone countries, for over 15 years. Cauris Management has invested in 42 companies and exited 35 in its target region. The investment portfolio has included agribusiness, financial services, hospitality, telecoms, consumer goods, and downstream oil and gas.
Earlier this year, in March-June, Cauris exited its stake in Petro Ivoire, a downstream oil and gas operator in Cote D’Ivoire, according to this report on Private Equity Africa. The deal was structured as a management buy-back and generated annualized returns of 23% for Cauris which first backed the company in 2006 in a CFA2.2bn deal in partnership with Africinvest. The company was expanding into bottled gas. During the five years the investors were involved, Petro Ivoire grew its network of petrol stations by 33% and is thought to be the third largest operator, and to have 19% of butane gas market after investing in a butane gas filling plant in 2007.

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