Global emerging market investor Actis announced a 36% equity investment in East Africa-based tyre wholesaler and retailer the AutoXpress group, last month.

This investment supports a high-class management team in a growing region and subsector that meets the demands for high-quality goods and services by the emerging market consumer.

“Actis sees high growth potential in the auto after-sales parts market, as more Kenyans are acquiring cars and the nature of the car market means replacement parts are critical,” says Actis head of private equity Peter Schmid, adding that there is a demand for high-quality products and services in convenient locations.

He notes that Actis can deploy a strong integrated investment team, capitalising on on-the-ground professionals in Nairobi, including operational partners and sector experts to help expand the business.

Operating at 20 company-owned stores in Kenya and Rwanda, AutoXpress is the key distributor and retailer of tyre, battery and suspension brands, including Pirelli, Dunlop, Mar-shal, BKT, KYB and Energizer.

Servicing corporate customers and the fast-growing Kenyan retail market, AutoXpress is a third-generation family business.

Schmid points out that Actis has a 65-year history of investing in Africa, which forms the core of its investment strategy, with more than 40% of its investments being on the continent. It currently has $1.3-billion invested in Africa and a $200-million portfolio in energy and real estate in East Africa.

“AutoXpress is a compelling entrepreneurial business that meets a core consumer need – access to quality tyres, automotive parts and services in convenient locations. In partnership with the AutoXpress management team, we intend to accelerate AutoXpress’s expansion across East Africa to become the leading pan-regional tyre and auto-parts business,'” he says.

Actis head of East Africa Michael Turner adds that Actis is building on its long record of supporting high-quality management teams in African businesses.

“AutoXpress's products and services are particularly relevant to the Kenyan market, which is dominated by second-hand cars. By supporting the leading provider of after-market tyres, auto parts and services, we hope this investment will directly benefit east African consumers and businesses,” he comments.

AutoXpress MD Sandeep Shah notes that the proven record, industry experience and regional insights of Actis make it the right investor to support AutoXpress in its next stage of growth in East Africa.

“With additional stores planned for Kenya and our imminent entry into the Tanzanian market, we look forward to working with Actis’ in-house value creation group to assist in implementing our market strategy of expanding the products and services that our customers need,” he concludes.