The Initiates Plc acquires additional 20% stake in Uganda subsidiary

The Initiates Plc (TIP) has acquired an additional 20% equity stake in its Ugandan subsidiary, The Initiates Uganda (TIU), increasing its total ownership to 55% and converting the East African operation into a full subsidiary of the Nigerian-listed company.

The development was disclosed in a shareholder notification signed by Managing Director and Chief Executive Officer, Reuben Mustapha Ossai, and filed with the Nigerian Exchange (NGX) on May 29, 2026.

The transaction, completed on May 5, 2026, is expected to strengthen TIP’s expansion into East Africa’s oil and gas services market while providing the group with access to dollar-denominated earnings and greater operational control over its Ugandan business.

What TIP is saying: 

The acquisition represents TIP’s most significant cross-border transaction to date and reinforces its ambition to build a pan-African waste management business.

Commenting on the company’s long-term direction, Ossai said:

• “We’re building a pan-African waste management company, and this is just the beginning.” 

The company stated that the deal was funded entirely through internal cash flow, with no external borrowing or equity issuance required.

TIP increased its stake in The Initiates Uganda from 35% to 55%, crossing the majority ownership threshold and converting TIU into a full subsidiary.

• The transaction was completed at a consideration of $2.02 million, based on a total valuation of $15 million for the Ugandan business.
• TIP secured three board seats in TIU and obtained veto rights on all capital expenditure above $500,000.
• TIU’s earnings are denominated in US dollars, providing revenue diversification and a natural foreign exchange hedge for the group.

The company noted that the acquisition gives it direct access to Uganda’s growing oil and gas services sector while strengthening its governance and operational influence over the subsidiary. The CEO’s statement underscores management’s intention to continue pursuing regional expansion opportunities as it seeks to establish a broader presence across African energy markets.

More insights: 

Uganda’s oil and gas industry is currently undergoing significant development, creating opportunities for companies providing environmental, waste management, and industrial cleaning services.

• The East African Crude Oil Pipeline (EACOP), a 1,443-kilometre pipeline connecting Uganda’s oil fields to Tanzania’s port of Tanga, is expected to drive increased demand for industrial support services.
• By increasing its ownership stake now, TIP positions itself to benefit from future contract opportunities linked to upstream oil and gas activity in Uganda.
• The three board seats and veto rights on major capital expenditure decisions give the Nigerian company greater influence over TIU’s growth strategy and resource allocation.
• Management stated that TIU’s dollar-denominated earnings will help improve the overall earnings quality and performance of the group.

The company also disclosed that TIU’s financial performance will begin to be reflected in TIP’s consolidated accounts from Q4 2026, providing investors with a clearer view of the subsidiary’s contribution to group earnings.

Get up to speed: 

TIP delivered a strong earnings performance in 2025, with pre-tax profit rising 147.1% to N5.07 billion from N2.05 billion a year earlier, supported by robust growth in its waste management business.

• Revenue more than doubled to N11.7 billion, increasing by 150.9% year-on-year. The bulk of the company’s earnings came from its waste management operations in Kwale, which generated N8.7 billion, while its Port Harcourt operations contributed N2.9 billion.
• The strong top-line growth flowed through to profitability, with gross profit climbing 145.5% to N6.16 billion and operating profit rising 130.3% to N4.91 billion despite higher administrative expenses.
• Finance costs declined to N44.9 million from N80.2 million, further supporting earnings growth. As a result, profit after tax advanced 145.6% to N3.39 billion.

The improved performance strengthened shareholder value, with earnings per share increasing to N3.81 from N1.55, while retained earnings expanded to N5 billion from N1.7 billion, reflecting the company’s growing profitability as it targets ambitious pan-African expansion.

What you should know:

The acquisition is the clearest indication yet of TIP’s strategy to build a pan-African waste management company through majority-owned subsidiaries in key energy-producing markets.

On Friday, May 29, shares of TIP gained 95kobo or 3.46% to close at N28.40 per share. The Initiates began the year with a share price of N13.30 and has since gained 114% on that price valuation, ranking it 24th on the NGX in terms of year-to-date performance.

Investors are expected to monitor upcoming quarterly results closely to evaluate the earnings contribution from the Ugandan subsidiary.