Photo: IFAD
The USAID CATALYZE Engines of Growth (EoG) Activity through its partnership with WM Equity Partners (WMEP) successfully helped secure equity financing for a growing Serbian meat and agriculture production company. Private equity is a good alternative to loans, particularly for the region’s small and medium-sized enterprises (SMEs) in the meat and agriculture sector as they are struggling to obtain capital. Because the leverage (level of debt) of a company is always limited, the additional equity can support faster growth.
“The company recognized the need to introduce a strategic partner into their business due to the market’s move toward consolidating. Big players are needed for further investment and growth”, shares Vladimir Pavlovic from WMEP.
WMEP assisted in the process of negotiations, mediation, and transaction for the company. The investor, now the majority shareholder, will continue to expand operations in Serbia and the regional market with plans for additional acquisitions.
Pavlovic said, “It is easier to find private equity (than it was years ago), and it is a good alternative to loans. The support of CATALYZE is essential because it enables us to work with companies not normally interested in paying for our services. Now, all the actors involved understand the value of this process. This is a step-by-step approach. Only 5% of business owners in Serbia perceive equity financing as a ‘normal’/optimal option. With success stories such as these, we can change the business community’s perspective around private equity.”
This is USAID CATALYZE EoG’s first transaction in this sector. We hope for many more as we work to build the business community’s trust in equity funding as an alternative solution for growth.
About USAID CATALYZE USAID CATALYZE, implemented by Palladium, is an 8-year program designed to mobilize $2 billion in private capital for development impact, especially in underserved social sectors and frontier markets across the globe, complemented by a cross-cutting inclusion of gender-lens investing. CATALYZE supports blended finance solutions working with local and international businesses and investors to explore and find commercially viable opportunities and approaches to creating jobs, developing sustainable social services, tightening and rationalizing supply chains, and advancing inclusive growth. We work across 28 countries in Asia, Africa, Europe, Latin America, and the Caribbean, with 190 partners, including financial institutions, business advisory service providers, anchor firms, and job trainers. This article was originally published by USAID CATALYZE
