The Canada Pension Plan Investment Board is investing in a Colombian discount grocery chain.
The US$335 million investment in D1, which is owned by the Koba International Group, secures a 19.3 per cent stake for the CPPIB. The transaction is its first direct private equity investment in Colombia.
According to a press release, the CPPIB believes the grocery chain’s business model could generate a high return on the capital investment. Operating 10 distribution centres and more than 800 stores, it uses a hard discount model of grocery retailing based on offering a core assortment of low-cost staples, allowing its stores to operate with limited expenditure.
In the release, Tania Chocolat, head of active equities in Latin America and head of the CPPIB’s Sao Paulo office, said Colombia is among the markets the investment organization has identified as undergoing rapid transformation and primed for growth. “Our investment in D1 supports our goal of identifying standout companies in the region that are well-positioned to deliver strong long-term, risk-adjusted returns for the [CPPIB].”
In other news, the Ontario Municipal Employees’ Retirement System is acquiring a U.K.-based utility and infrastructure maintenance service provider.
Headquartered in Manchester, Network Plus provides support to water, electricity, gas and telecommunications service providers across the U.K. It employs 5,000 professionals who operate out of 85 regional offices and depots.
In a press release, Simon Jones, director of OMERS Private Equity Europe, said the investment organization was attracted to Network Plus due to its strong growth in the past five years.
“We are excited, not only by the significant whitespace remaining in core markets, but also by opportunities to expand into adjacent sectors with the same need for recurring repair, maintenance and investment services and where customer safety and service are paramount. With OMERS’ deep experience in bolt-ons and strategic acquisitions, as well as substantial capital to deploy, we are well-positioned to support the company’s strategy.”