Kenya’s ARM Cement, formerly Athi River Mining Ltd, has raised $140 million led by the CDC Group (CDC), to meet the growing demand of housing and construction in East Africa’s largest economy.
ARM was advised by Bowmans Kenya, the largest equity deal in Kenya and East Africa in 2016, and one of the largest equity deals in Kenya to date. The Nairobi Securities Exchange listed firm has operations in Kenya, Tanzania and Rwanda.
According to Paras Shah, team lead and head of M&A at Bowmans Kenya, the deal enables ARM to develop its core business in Kenya and be a platform to expand into the rest of the region.
“This deal is indicative of the increased infrastructure development in the East African region. The demand for quality and sustainably produced cement has never been higher, and this deal capacitates ARM to meet this demand head-on. The deal is good news as it is expected to create jobs due to increased production and opportunities all along the supply chain,” said Shah.
The CDC is the United Kingdom’s Development Finance Institution, wholly owned by the UK Government. ARM produces cement, lime and fertilizer in Kenya, Tanzania and Rwanda.
Bowmans Kenya advised ARM on all the legal aspects of the transaction, M&A, banking & finance, capital markets, real estate, mining, competition, employment and Tanzania law aspects of the deal.
This is not CDC’s first investment in the firm, in April, ARM raised $140 million investment from the firm to boost the local supply of cement in East Africa and promote infrastructure development. CDC’s capital was expected to help the company develop its existing business and to potentially expand its operations into neighbouring countries.
ARM, operates under the brand name Rhino Cement and produces 2.7 million tonnes a year and employing 3000 people. CDC’s long-term investment is designed to help strengthen ARM’s financial structure and to help the company develop to meet the growing demand for sustainably produced cement across sub-Saharan Africa. CDC also owns a 10.7 per cent equity stake in I&M Bank.