Private Equity Fund investor Ascent Rift Valley Fund has acquired a majority stake in Auto Springs East Africa, making its first investment in the automobile industry in the region and its second investment in Kenya.
Based in Limuru, Auto Springs East Africa produces products for the motor assembly and vehicle spare parts industry, including wiring harness, leaf springs, nuts, bolts and washers to fit cars, trucks and SUVs.
The fund has partnered with SFC Finance Limited, a nonbank financial institution which will offer the debt financing.
The institution provides secured medium and long-term debt financing to SMEs in Africa. “SFC has come in as a debt partner and the Ascent Rift Valley Fund will provide equity in this transaction,” Ascent Capital Advisory Services LLP partner David Owino said during the deal signing.
Besides the capital going to acquiring the majority stake in the company, Ascent announced the financing will be used for product expansion and factory improvements. The assembly industry in Kenya is growing with the entry of major international players looking to turn around the local car assembly industry. Currently , Peugeot and Volkswagen manufactures their respective type of models in the country.
Also to note is the full acquisition of Associated Vehicle Assemblers (AVA) by Simba Corporation last year.