Detailed due diligence of a major agribusiness group for an impact investor

Engagement

In this engagement, we drew on our substantial international experience in the dairy industry, extensive “boots on the ground” relationships, and insights into business, finance, government, and industry associations in East Africa’s dairy industry.

ORI helped the impact investor team by:

  • Undertaking detailed research related to the firm’s fast growth rate, including any political or other support that could potentially be of concern to any investor/partner.
  • Providing an opinion on East Africa’s dairy industry growth trends and assessing how it squared with the firm’s fast growth and the possible impact of the deal closure on the regional dairy industry.
  • Conducting detailed due diligence reviews and checks to ensure no hidden problems (including reputational issues) involving the firm's shareholders and directors.
  • Examining the firm’s partnerships across the banking industry as it related to potential risks from the intersecting shareholding of some directors, international expansion partners, and related companies.
  • Providing an opinion on potential risks for the impact investor related to the deal, and preparing an enhanced set of conditions precedent and assurances (as part of the risk mitigation plan) before investment closure.
Outcomes
  • Building on the opinion and recommendations of the engagement, the investor successfully closed a multi-million dollar equity investment in the business.
  • The detailed risk mitigation plan and assurance were essential in structuring financial tranches based on fulfilling an enhanced set of conditions precedent.
  • As a result of this investment, the business has continued to grow and thrive, offering a profitable market to tens of thousands of smallholder dairy farmers supplying it with quality milk.
  • New equity and debt investors have since invested in the firm to improve the milk supply chain by supporting smallholder dairy farmers' access to better dairy feeds, providing quality extension services, availing livestock pharmaceuticals, and assisting the firm in achieving ESG compliance across its business functions.