Information on the Target

Injaro Agricultural Capital Holdings Limited ("IACHL" or "the Fund"), managed by Injaro Investments, has announced the sale of its entire stake in Agricare Limited, Ghana's oldest animal feed producer, to Flour Mills of Ghana Limited ("FMGL"). The transaction marks the Fund's full exit from Agricare following a holding period of nearly eight years, during which significant operational improvements and growth were achieved.

Agricare, based in Kumasi, is renowned for manufacturing and selling animal feed across Ghana. The company operates a cutting-edge production facility with a capacity of 240MT per day. Injaro's investment was strategically aimed at enhancing the facility's utilization, developing the raw material supply chain, and expanding product lines while entering new local markets.

Industry Overview in Ghana

The animal feed industry in Ghana is an essential sector within the agricultural framework of the country, providing critical support to local poultry and livestock farmers. With a growing population and increasing demand for livestock products, this industry is witnessing a notable rise in production capabilities and innovation. As of recent years, both private and public investments in agribusiness have been on the upswing, contributing to the overall economic growth in the region.

Ghana's government has actively promoted initiatives to enhance food security and stimulate the agriculture sector. This includes support for the establishment of cooperatives and organized farming groups designed to increase efficiency in production and distribution of agricultural products, including animal feed. With a robust policy framework, the feed manufacturing sector is now more attractive for investment.

In the face of challenges such as supply chain disruptions and the rising cost of raw materials, companies in the animal feed industry are forced to innovate continuously. Strategic partnerships and technological advancements have become vital, supporting the need for businesses like Agricare to adapt and scale efficiently within this competitive market.

Overall, the future of the animal feed industry in Ghana appears promising, as newer market entrants and established brands alike work diligently to meet the increasing demands of local farmers and enhance product offerings.

The Rationale Behind the Deal

The decision to sell Agricare to FMGL is rooted in a successful investment journey that brought about significant operational and financial improvements for the company. During Injaro's eight-year tenure, Agricare achieved an annualized revenue growth rate of 62%, marking its recovery as a leading brand in the Ghanaian animal feed market.

Moreover, the operational and supply chain enhancements implemented during Injaro's management not only stabilized Agricare's standing but also increased its market reach and profit margins. The sale aligns with Injaro's strategic objective of exiting mature investments while allowing FMGL to leverage Agricare’s established brand and distribution network to serve a broader market.

Information About the Investor

Injaro Investments is a prominent investment advisory firm based in Ghana, licensed by the Ghana Securities and Exchange Commission. The firm forms part of an international group managing over USD 100 million in assets across several funds, focusing on private equity, asset management, and consultancy services. Injaro specializes in agribusiness investments, supporting small to medium-sized enterprises across West Africa to stimulate sustainable economic development.

With a history of impactful investments, Injaro has been pivotal in unlocking growth potentials in the agriculture sector, contributing to job preservation and promoting local farming initiatives. The successful exit from Agricare demonstrates Injaro's commitment to generating social impact alongside financial returns, while also paving the way for future investment opportunities.

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This exit from Agricare exemplifies a strategic and well-timed decision by Injaro, showcasing the effectiveness of purpose-driven investment strategies in fostering growth and sustainability in local markets. Given the considerable achievements of Agricare during Injaro's involvement, this transaction not only provides a profitable return for the investors but also ensures the continuity of a legacy brand within Ghana's agricultural landscape.

The transition of Agricare under FMGL is poised to harness further innovation and growth, especially with the integration of Agricare products into FMGL's existing portfolio. This could lead to enhanced market share and potentially create new value chain partnerships.

Evaluating the overall investment and exit strategy illustrates that Injaro successfully balanced financial objectives with transformative social outcomes. The significant revenue growth and the positive impact on local communities underscore the viability of investments in the agribusiness sector.

Therefore, this deal appears to be not only a good investment from a financial perspective but also serves as a strong case study demonstrating how strategic partnerships in the agribusiness sector can yield benefits for a wide range of stakeholders.

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