Logistics firm Cold Solutions is selling a 21.6 percent stake to South African private equity company Inspired Evolution at an estimated Sh2.58 billion ($20 million) as it seeks capital to expand operations in Kenya and the wider East African region.
Inspired Evolution, through its Evolution III Fund, is seeking regulatory approval from the Comesa Competition Commission (CCC) to acquire the minority shareholding.
The exact value of the transaction has not been disclosed by the regulator, but the Cape Town-based private equity firm announced in October that it would commit $20 million (Sh2.58 billion) to support Cold Solutions’ expansion.
Both companies have said the funds will be used to grow Cold Solutions’ food and pharmaceuticals refrigeration services across East Africa, including constructing additional cold storage facilities.
‘The proposed investment by Inspired Evolution is expected to facilitate the expansion of cold chain infrastructure across the region, underpinning critical sectors, driving regional economic development, and promoting sustainable growth,’ said the CCC in a notice of inquiry into the deal.
The commission, the antitrust regulator for the Common Market for Eastern and Southern Africa (Comesa), is reviewing the transaction rather than Kenya’s Competition Authority (CAK), as the company operates across multiple countries in the bloc.
Beyond Kenya, Cold Solutions East Africa has operations in Uganda, Rwanda, and Tanzania, though its business is largely managed from Kenya, where it has constructed its only physical storage facilities.
It currently operates two temperature-controlled warehouses in Kenya -one in Tatu City Special Economic Zone, Kiambu, and another in Mombasa – while providing logistics and distribution services nationwide.
Development of similar facilities in Uganda, Rwanda, and Tanzania remains in the planning stage, delayed by a funding shortfall that the minority stake sale aims to address.
In Uganda, land has been acquired and preparations for construction are underway.
In Rwanda, the company has broken ground on a new facility, while in Tanzania the land purchase has just been completed. Proceeds from the minority stake sale will accelerate these projects and further expand Cold Solutions’ footprint in Kenya.
Cold Solutions is currently wholly owned by an investment vehicle controlled by Arch Cold Chain East Africa, whose principal shareholder is African Rainbow Capital, majority-owned by South African billionaire Patrice Motsepe.
Inspired Evolution, also South Africa-based, has operations in Burundi, Kenya, Mauritius, Uganda, and Zimbabwe. Its investors include the African Development Bank, the International Finance Corporation, and the European Investment Bank.
Cold Solutions will be the fourth company in which the Evolution III Fund has invested, following Equator Energy in Nairobi, and Red Rocket Group and Sedgeley Solar Group, both based in Cape Town.