Target Information

Amethis has completed the sale of its entire minority stake in Velogic Holding Company Limited through an initial public offering (IPO). Based in Mauritius, Velogic has over 50 years of experience in the logistics sector, encompassing international transit, customs clearance, transportation, warehousing, port services, courier services, maritime agency, and special sugar packaging. The company serves a global clientele across various industries, including healthcare, retail, construction, and fashion, with notable clients such as Huawei, Galeries Lafayette, and various United Nations agencies.

Velogic is managed by a bilingual and experienced team, employing 1,400 staff and over 300 agents worldwide. Amethis originally invested in Velogic in December 2013 to support the company's geographic expansion. Velogic began its first operations on the African continent in 2016 by acquiring two companies in Kenya focused on customs clearance and transportation. With this expansion into East Africa, Velogic is now strategically positioned in seven territories: Mauritius, Kenya, Madagascar, Réunion, India, Singapore, and France, with its border markets in Kenya and India exhibiting double-digit growth.

Industry Overview

The logistics industry plays a crucial role in facilitating the movement of goods worldwide. The recent global health crisis highlighted the importance of this sector, which has demonstrated resilience during challenging times. In Mauritius, the logistics sector is evolving rapidly, characterized by increased demand for efficient supply chain solutions amidst a surge in e-commerce and international trade activities.

With the rise of digital platforms, companies in the logistics space are leveraging technology to enhance their service offerings. The adoption of innovative solutions, such as automation and data analytics, is transforming logistics operations, making them more efficient and responsive to market demands. This trend is fostering a competitive environment that encourages growth among logistics providers.

Furthermore, the extension of regional trade agreements and infrastructure investments is bolstering the logistics sector's capabilities in Mauritius. The country is well-positioned as a logistics hub within the Indian Ocean region, serving as a gateway for trade between Africa and other continents. The government's support for the logistics industry, including incentives for infrastructure development, further reinforces its potential.

As companies like Velogic expand their presence across the region, the logistics industry in Mauritius and the broader Indian Ocean area is poised for significant growth, driven by rising trade volumes and the need for optimized supply chain networks.

Rationale Behind the Deal

The decision by Amethis to exit its investment in Velogic via an IPO was driven by the company's strong performance and growth trajectory. During Amethis's investment period, Velogic increased its revenue to over EUR 75 million and more than doubled its EBITDA to approximately EUR 7 million, thanks to rising transaction volumes and a diversification into higher-margin services. This strong financial performance made the company an attractive proposition for public investors.

The IPO will not only provide liquidity to shareholders but also enhance Velogic's visibility in the market, allowing it to attract both local and international investors. By listing on the Stock Exchange of Mauritius at an IPO price of 25 MUR per share, Amethis successfully divested its 33.77% stake while enabling the Group Rogers, the majority shareholder, to maintain its controlling interest in the company.

Investor Information

Amethis is a private equity firm dedicated to investing in growth opportunities across Africa and the Indian Ocean region. Founded by experienced professionals, the firm aims to support the development of sustainable businesses that contribute to the region's economic growth. Amethis's investment philosophy focuses on building strong partnerships with local management teams to drive value creation and operational improvement.

Throughout its investment in Velogic, Amethis actively contributed to the company's strategic expansion, enabling it to capitalize on emerging market opportunities. The successful exit via the IPO on the Stock Exchange of Mauritius is a testament to Amethis's commitment to fostering regional champions in the logistics sector, thereby promoting the growth of African commerce.

View of Dealert

The complete exit from Velogic appears to be a strategic and well-timed move by Amethis. Given Velogic's impressive growth in revenue and EBITDA during the investment period, the IPO has provided an excellent opportunity for both Amethis and new investors to benefit from the company's bright outlook. The expansion into fast-growing regions like East Africa and India further demonstrates Velogic's potential for continued growth, making the investment an attractive proposition.

Moreover, the decision to list on the Stock Exchange of Mauritius reflects positively on the company's market positioning and provides a platform for future growth. Increased liquidity and access to capital markets will enable Velogic to pursue further expansion and enhance its operational capabilities in the competitive logistics landscape.

From an investment perspective, this exit route through an IPO can be considered a successful strategy, aligning with Amethis's goals to generate attractive returns while supporting sustainable business practices. The continued focus on environmentally responsible operations and ambitious employee training programs underscores Velogic's commitment to sustainable growth and corporate social responsibility.

Overall, the transaction positions Velogic favorably for future success, and Amethis's exit can be deemed a significant accomplishment in their portfolio, as it highlights the potential for other investors looking to capitalize on the growth of emerging market logistics firms.

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