Deal Summary
The International Finance Corporation (IFC) has invested $37m in Building Logistics Services S.A. (BLS), a logistics service provider and third-party logistics operator in Morocco, for a 20% minority stake. IFC’s investment is expected to finance bolt-on acquisitions of other logistics service providers, expand BLS’s existing warehouse facilities, and construct greenfield warehouse facilities and logistics platforms in various large cities in Morocco. BLS is majority-owned (estimated ownership of 59.7%) by H&S Invest Holding, a diversified family-owned holding company founded in 2005 by Moncef Belkhayat (a Moroccan entrepreneur) operating in FMCG, logistics, pharmaceuticals, media & communication, and real estate.
IFC will partner with minority shareholder STOA (acquired 20% for €30m in 2023), an impact fund created in 2017 by the Caisse des Dépôts and the Agence Française de Développement (AFD) to finance infrastructure in emerging and developing countries. Noticeably, this investment was allocated in Moroccan dirhams—indicating the strength of Morocco’s national currency.
Deal Rationale
Ahead of the 2030 World Cup, Morocco continues to receive private-sector funding. Over the past three years, IFC has committed approximately $1.3 billion in Morocco, with nearly $600 million already dedicated this fiscal year alone. Recently, Amethis-backed Globex also acquired Morocco’s Logic Transport, further acknowledging Morocco’s role as a regional powerhouse for logistics. Morocco’s location and free trade agreements with the European Union & North America make it attractive for investors looking to invest in the African logistics space. Furthermore, BLS’s recent acquisition of Hibat Transport SARL indicates a growing regional logistics champion.
- Market Opportunity: Morocco's logistics market is poised for significant growth in the coming years. It is estimated at $22.59 billion in 2024 and is expected to reach $30.38 billion by 2029, growing at a CAGR of 6.11%. The government's National Logistics Strategy 2030 aims to reduce logistics costs and improve efficiency, which is expected to create around 36,000 jobs and strengthen the overall logistics sector. However, the Agility Emerging Markets Logistics Index saw Morocco drop two positions in its rankings. This can be attributed to lower scores in the Domestic Opportunities sub-index, where Morocco dropped nine places. On the other hand, Morocco has shown steady growth in its logistics and 3PL industry, making the potential return on this investment in BLS favorable for the IFC.
- Risk/Return Analysis: BLS growth plans indicate a project plan of up to $210 million ahead of an Initial Public Offering. IFC’s equity investment is expected to strengthen the creditworthiness and governance of BLS while also providing patient capital to support BLS’ preparation for a planned IPO. IFC is expected to provide corporate governance capacity building to help BLS transition from a family-owned business ahead of its IPO. Additionally, the experience of IFC’s investment team in Africa, particularly in Moroccan businesses like Retail Holdings, presents an avenue to leverage local contacts and supply chains to boost BLS business.
About the Fund Manager
The International Finance Corporation (IFC), a member of the World Bank Group, was established in 1956 to promote private sector investment in developing countries, with a strong emphasis on Africa. IFC aims to alleviate poverty and foster sustainable economic growth by creating market opportunities that attract private capital. The organisation manages over 18 funds, focusing on infrastructure, agriculture, and technology. Through these efforts, IFC plays a pivotal role in strengthening the private sector through impact investing and addressing critical challenges across the continent.
