Situation
Over the last 5-years our client had built one of the largest FMCG convenience food brands in Zambia. The company manufactured its products in China and imported near finished products for packaging and distribution in Zambia. The company faced growing competition in the sector, exposure to FX risks and stock-outages from supply chain issues due to delays at port. The decision was made to raise capital to construct a local production facility and bring all production in-house to mitigate these risks and drive regional expansion. Open Capital was engaged as sole lead arranger to structure and lead the transaction.
Our Process
OCA supported the company to:
- Review existing operational and strategic materials to understand and advise on growth scenarios
- Work with the CEO to define and articulate regional growth strategy
- Develop an investor-facing investment memorandum to target different investor audiences
- Build a multi-country financial model to determine capital need and define capital raise strategy
- Lead investor outreach and due diligence process with over 30 investors across private equity, family offices, impact investors and strategic investors
- Support the company with term sheet negotiation through to close
- Liaise with legal counsel, the company and investors to coordinate the legal documentation process through to financial close
The original capital need was increased from US$ 2M to US$ 4M to ensure that the facility size was sufficient to fuel regional growth over the next 5 years. We helped the company raise US$ 4M of equity, convertible notes and warrants from an African impact investor and European strategic. The involvement of the strategic partner gives the impact investor a natural exit and warrants provide the founder with upside depending on performance.
