QSR Chain - Nigeria
Services Provided: M&A Advisory
The Assignment
A Scandinavian developing markets investment fund hired Canyon Springs Advisors to work closely with their deal team to investigate an opportunity in the Nigerian QSR space. The Fund, part of a governmental organization, has a charter to assist in the development of the agricultural sector in Sub-Saharan Africa by making timely investments in consumer & retail businesses. The project was led by our African team with a time horizon of three weeks from start to final report and presentation.
Our Approach
Our Africa team approached the assignment in four ways – visits and interviews with a wide sample of store managers in Lagos, Port Harcourt and Abuja, meetings with all senior management and functional leaders at HQ, and interviews with suppliers and real estate developers. Our goal was to evaluate the quality of the top management teams, benchmark financial performance with other emerging market QSR’s, assess the robustness of operating systems, and forecast future business growth.
Results
We provided a full strategic audit of the business and made many recommendations for improvement by listing key value creation levers that could be employed to strengthen financial performance and overall operations. We evaluated every functional area of the company including operations, HR, real estate and construction, supply chain, Restaurant Support Center, IT, and concept attractiveness. Following our review with the deal team, we recommended that the Fund go ahead with their investment considering their mandate. We did list a number of red flags that merited attention and also provided a 100 day plan to highlight the most immediate areas of focus. The Fund did choose to invest and the QSR chain is doing well despite all the challenges in the Nigerian market.