Kassy Kebede makes bold move in Ethiopia with Lion Brand investment

By Ebimo Amungo

Ethiopian-American Kassy Kabede, the New York based private equity guru is increasing his investments in his native country Ethiopia. Cepheus Growth Capital Partners, led by Kabede, has made a significant minority investment in Lion Brands, one of Ethiopia’s largest fast moving consumer goods company. Cepheus is also in the process of raising $100 Fund as it prepares for emerging opportunities in telecoms, banking and services in Ethiopia.

The deal is the second for Cepheus Growth Capital Partners maiden fund, and the private equity firm invested an undisclosed amount of fresh equity for a significant minority stake in East Africa Lion Brands Manufacturing Share Company (Lion Brands).

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Based on the outskirts of Addis Ababa, Lion Brands manufactures products for a number of consumer market sectors including the home care, personal care, and food segments. The investment capital will be used to expand the company’s manufacturing capacity, help improve its operations, and raise its ESG standards.

With this investment, Cepheus Capital will hold a significant minority ownership stake and provide strategic, managerial, and operational support to Lion Brands.

Kassy Kebede and Berhane Demissie, Cepheus Capital’s Managing Partners, said: “We see Lion Brands as an excellent investment opportunity that is very much aligned with our values and the growth trends and trajectory of the Ethiopian economy.”

“As seen during the current COVID-19 pandemic, it is essential that local companies have the resilience and the resources to continue producing goods during difficult times. Cepheus Capital remains actively engaged in Ethiopia to support local businesses that provide essential goods and services within the country.”

Lion Brands, a company under the umbrella of East African Group (EAG), based in Addis Ababa, is embarking upon a major expansion of its production capacity to meet growing demand for its products in Ethiopia.

The equity investment will support the company’s expansion plans and also facilitate operational enhancements as well as raise Lion Brands’ environmental, social, and governance standards.

The Group Chairman of EAG, Buzuayehu T. Bizenu, said: “We are delighted to have Cepheus Capital as our partner in Lion Brands, as we work together to turn the company’s potential into reality”.

Batuael B. T. Bizenu, Managing Director for Investments who led the deal from EAG’s side, said: “Cepheus Capital’s determination to raise Lion Brands’ operational standards is completely aligned with our desire for the company to be the leading FMCG manufacturer in Ethiopia, with a reputation for its commitment to supporting the community it operates within. We look forward to working with the team at Cepheus Capital in the years to come”.

Tim Hill, Investment Director at Cepheus Capital, who led the deal, said: “Lion Brands is a company with a strong portfolio of products, many of which enjoy tremendous brand loyalty from the Ethiopian consumer. With Cepheus Capital’s investment to improve and expand the company’s operations, Lion Brands has a significant opportunity for growth.

In addition, the leadership team within East African Group share Cepheus Capital’s vision of how to deliver the enormous potential of Lion Brands, and we are delighted to have such strong partners alongside us.”

Cepheus Capital is a private equity firm that invests in Ethiopia’s most promising businesses and entrepreneurs. Besides providing capital, the firm also delivers management and operational expertise to its portfolio companies and assists them in the adoption of strong environmental, social and governance standards.

Cepheus Capital is finalizing the fundraising for its first $100m fund that will be deployed across the manufacturing, agro-processing and services sectors.

As part of the deal, Berhane Demissie, once of Cepheus’s managing partners, joins Lion Brands’ Board of Directors.