Deloitte Financial Advisory East Africa is proud to have supported Norfund (the Norwegian Investment Fund for developing countries) with due diligence services in relation to their mezzanine debt investment in Balaji Group, a leading apparel manufacturer in Sub-Saharan Africa based in an Export Processing Zone in Nairobi, Kenya. Deloitte was contracted to assist Norfund in identifying any financial risks that may be associated with the intended investment.
In February 2023, Norfund and Ethos Mezzanine Partners executed a USD 25 million mezzanine debt investment in the Balaji Group (USD 12.5m each). Proparco (a subsidiary of the French Development Agency) invested with Ethos Mezzanine Partners in the deal. Balaji Group is based in an Export Processing Zone in Nairobi, Kenya where it operates the largest apparel manufacturing business in Sub-Saharan Africa, producing garments for many global brands and retailers which are exported predominantly to the USA.
The investment in Balaji Group will contribute to the growth of the textile and apparel sector, which is a key driver of economic growth in Kenya, and create job opportunities (both direct and indirect) across the company’s manufacturing value chain.
KCB Group’s acquisition of a majority stake in Trust Merchant Bank
Kenya Commercial Bank (KCB) was seeking to expand its footprint beyond Eastern Africa by establishing its presence in the Democratic Republic of Congo (DRC) through a proposed strategic acquisition of up to 100% equity stake in Trust Merchant Bank (TMB). TMB is the largest locally owned commercial bank in the DRC with USD 1.7 billion in total assets and a footprint of 109 branches spread across the country.
Deloitte was appointed as the lead financial advisory expert firm to provide buy side transaction advisory services (including transaction structuring, business valuation, preparation of non-binding offer, negotiation support and deal advice) relating to the transaction.
In December 2022, KCB completed acquisition of 85% of the shares of TMB for an estimated value of over KES 15 billion. The existing TMB shareholders will continue to hold the 15% balance for a period of not less than two years, after which KCB may acquire their shares.
The acquisition of TMB provides several benefits to KCB Group, which include expanded scale of operations, shareholder and stakeholder value, financial inclusivity, potential synergies and sustainability and effective competition.