Information on the Target

Dune Packaging Ltd, based in Nairobi, Kenya, is a prominent player in the East African packaging solutions market. With over 20 years of operational experience, the company specializes in various packaging services, including the production of custom printed paper bags and polypropylene woven sacks through its subsidiary, Tiger Packaging Ltd. Dune Packaging has built a strong reputation for quality and innovation, catering to the diverse packaging needs of businesses across multiple industries.

In recent years, Dune Packaging has actively enhanced its environmental, social, and governance (ESG) practices, positioning itself as a responsible and sustainable packaging provider. The company's commitment to customer satisfaction and sustainability has solidified its status as a preferred choice among clients in Kenya and the broader East African region.

Industry Overview in Kenya

The packaging industry in Kenya is witnessing significant growth, driven by rapid urbanization, rising consumer incomes, and an increase in demand for quality packaged goods. As consumers seek convenience and accessibility, businesses across various sectors are turning to innovative packaging solutions to meet these evolving demands. Consequently, the packaging sector has become an attractive investment area for both local and international investors.

Kenya's strategic location as a gateway to East Africa further enhances its packaging sector's importance. The country has a growing manufacturing base and a vibrant retail environment that complements the packaging industry's expansion. Moreover, the government's commitment to supporting local manufacturing initiatives has created a conducive environment for investment.

The economic potential of the region is also bolstered by ongoing infrastructure developments, which improve logistics and distribution networks. These advancements facilitate the movement of packaged goods, thereby driving growth within the packaging industry. Investor interest remains strong, particularly in sustainable packaging solutions that align with global trends.

The Rationale Behind the Deal

The minority equity investment from Ascent Rift Valley Fund II represents a strategic partnership aimed at empowering Dune Packaging to enhance its operational capabilities and expand into new markets. This injection of capital is expected to accelerate the company's growth trajectory, both organically and through potential acquisitions, while reinforcing its market-leading position in the East African packaging sector.

Ascent’s backing complements Dune’s existing ESG credentials, enabling the company to further innovate its sustainable practices and align with international standards. The collaboration underscores a shared vision to capitalize on the booming packaging demand in the region.

Information About the Investor

Ascent Capital Management Africa II Ltd, the investment advisor to the Ascent Rift Valley Fund II, is a prominent private equity firm with a focus on supporting small and medium-sized enterprises (SMEs) in East Africa. With a fund size of USD 128 million, Ascent targets investments in scalable and fast-growing companies, emphasizing strategic guidance and operational improvement.

The firm aims to deploy investments ranging from USD 4 million to USD 15 million in its portfolio companies. Ascent has established a strong track record of partnering with local businesses, offering not only financial support but also expertise in navigating the complexities of the regional market.

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This investment is perceived as a strategic and favorable move for both parties. For Dune Packaging, partnering with a reputable venture like Ascent not only provides necessary financial resources but also enhances its strategic capabilities through Ascent’s extensive network and market insights. The infusion of capital will enable Dune to pursue its growth ambitions more aggressively, especially in an industry ripe with potential.

On the other hand, Ascent's investment into Dune Packaging aligns well with its strategy of supporting high-potential SMEs within the East African region. By tapping into Dune’s established, reputable brand and innovative approach, Ascent can expect positive returns on its investment as the packaging demand continues to surge in the region.

Overall, the collaboration represents a win-win scenario that is likely to yield substantial benefits for both Dune Packaging and Ascent. The strategic focus on enhancing ESG practices is an added advantage, reinforcing the importance of sustainable operations in today's business environment. In conclusion, the deal is poised to strengthen Dune's market position while delivering value for investors.

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