Global growth investor Abraaj Group has acquired a majority stake in Yörsan Group, a Turkish manufacturer and distributor of dairy products, in partnership with the European Bank for Reconstruction and Development (EBRD) and the Yörük family.
Yörsan has been manufacturing branded dairy products in Turkey for over 50 years, with a portfolio of products that include yoghurt, cheese, milk and the traditional Turkish drink – ayran.
The dairy sector in Turkey is estimated to be currently TL6.5bn size and has grown even during economically challenging years such as 2009 which highlights the industry's defensiveness. Growth in the Turkish dairy industry is driven by a number of attractive characteristics, according Selçuk Yorgancıoğlu, partner and regional head of Turkey and Central Asia at Abraaj. These include the continued conversion from open to packaged products due to rising urbanisation and an increasing share of organized retail which currently stands at 50 per cent of the market in terms of volume. Turkish income per capita levels, which have doubled over the last decade, are expected to do so again in the next ten years. Turkey's dairy sector demonstrates ample room for growth considering dairy consumption volumes per capita are still low at approximately 1/3 the levels of more developed markets.
Abraaj said it will look to transition Yörsan onto its next phase of growth both inside and outside of Turkey.
Yorgancıoğlu said, "The acquisition of Yörsan marks our 8th investment in Turkey since 2007. We feel privileged to be partnering with EBRD and the Yörük family on the acquisition of this much loved and iconic Turkish brand. Abraaj has a highly successful track record in Turkey underpinned by proven investment partnerships, landmark exits and a strong commitment to this vibrant country. Our investment pipeline in Turkey remains robust, with the long-term prospects for the Turkish economy continuing to look extremely good."
In what was the largest private equity FMCG transaction in Sub Saharan Africa, outside of South Africa, Abraaj recently acquired a majority stake in Fan Milk, a manufacturer and distributor of frozen dairy products and juices in West Africa. Abraaj also has ownership in Brookside Dairy, which is the largest dairy in East Africa.
Omar Syed, managing director at Abraaj, said, "Yörsan is a long established and respected brand in the Turkish dairy sector. We believe the company has great potential to quickly become the market leader in the higher value dairy segment. The combination of Abraaj's unique value creation focus, our global experience in the dairy industry and the strength of the company's management team will realize our ambition of transforming Yörsan from a highly successful family run Turkish dairy business into a world class FMCG player. To this end, partnering with EBRD is a strong value added aspect which provides us access and insight to the Balkans and CIS region."
Türkiye Garanti Bankasi and Yapı Kredi provided acquisition financing and acted as joint mandated lead arranger.