8 Miles Leads $80M Investment in Nigerian Snack Company
August 15, 2016
8 Miles, the London-based, sub-Saharan focused private equity firm founded by Bob Geldof, has led a consortium of investors including the Nigeria-focused African Capital Alliance (ACA), and DEG – Deutsche Investitions und Entwicklungsgesellschaft, the German Development Finance Institution, in an $80 million investment in Nigeria-based biscuit manufacturer, Biloxxi Industries.
Obi Ezeude, president and CEO of Biloxxi, told This Day Live that the investment is in exchange for a minority stake in the company effective August 1, 2016 and that the stake-holding will have a term of five years.
Despite being ranked as the third fastest growing global economy in 2014 and early 2015 by CNNMoney, Nigeria has fallen out of the projected top fifteen African economies for 2016, according to the International Monetary Funds (IMF) World Economic Outlook for 2016, which was revised in April of this year due to the collapse of global crude oil prices. In July the IMF cut its growth forecast for Nigeria, stating that the country’s economy is expected to contract by 1.8% this year as inflation has climbed by 16%.
However, Nigeria’s snack sector, especially in the country’s urban centers, has been resilient – seeing growth of between ten and fifteen percent per year, driven by population growth and more disposable income among the country’s consumers. Another supporting factor contributing to the strength of the category is the fact that 63 percent of Nigeria’s population, or about 115 million people, are below the age of 25.
Biloxxi’s growth has been a reflection of these trends – with the company seeing a growth rate exceeding 30% per year in recent years.
“The snacks segment is a fast growing part of the consumer sector in Nigeria,” said Nathan Mintah, co-founder and co-managing partner at 8 Miles. “Our investment will build on the Beloxxi’s strong brand and help accelerate the company’s expansion in Nigeria, in the wider West Africa region and beyond.”
Currently, Biloxxi operates five production lines at its plant in Agbara, in the Ogun State and also has several warehouses across the country. It has a network of 400 distributors and a workforce of approximately 2,300. Building upon this, the company plans to use the investment to fund its expansion – doubling its number of production lines to ten and increasing capacity from 40,000 metric tons of Cream Crackers per year to 100,000 tons per year.
“The completion of this funding process is the first of the many steps in the achievement of our objectives,” said Ezeude. “The investment will enable us increase our capacity significantly and grow in both our domestic and export markets. The Beloxxi story has only just begun.”
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