UAC Nigeria’s massive N182.4 billion acquisition of CHI Limited grabs attention – the biggest consumer goods M&A deal in Nigeria, at least in Naira terms. It definitely signals UAC’s intent to reshape its presence in the market.

Projected revenue jumps exceeding 200% by 2025? That’s the expectation. Word is, UAC aims to become a major player in Nigerian food and beverage. Estimates suggest a combined revenue of N615 billion from CHI and UAC Foods by the close of 2025. CHI is expected to contribute a huge chunk of that – N536 billion, while UAC Foods lags at N79 billion.

The expanded group’s performance during the first nine months of 2025 hit N717 billion. That’s a big difference compared to UAC Nigeria’s standalone N223 billion, which shows how big CHI’s inclusion is. Earnings before interest, taxes, depreciation and amortization (EBITDA) climbed to N67 billion, up from N25 billion.

How did UAC pay for CHI? A mix of cash (N30.8 billion) and debt (N151.6 billion), which came as a USD-denominated bridge loan priced at SOFR plus 5.5 percent. UAC plans to refinance this using bonds and term loans, possibly starting late 2025 or early 2026. They claim the USD exposure is fully hedged, protecting against currency fluctuations. We’ll see how that plays out.

This acquisition greatly impacts UAC’s overall financial figures. Profit levels rose dramatically, with EBITDA increasing 2.7x to N67 billion.

The headcount tells a similar tale. CHI’s workforce is huge, with 1,590 full-time staff and 3,444 contract workers, dwarfing UACN’s 1,367 employees at the close of 2024.

Net Working Capital (NWC) could hit N181 billion by the end of 2025, a 341.5 percent rise from 2024. To capitalize on this, UAC has secured N118 billion in working capital financing.

When you factor in the N152 billion borrowed for the acquisition, UACN’s net debt shoots up to N270 billion. Yet, the company insists it’s manageable, citing strong cash flow exceeding debt service by N56 billion.

No equity raise is in the cards, they say. Their cash flow is enough to cover debt, and they apparently see no need for extra cash right now.

CHI’s revenue has grown impressively, about 46 percent yearly between 2022 and 2025. Yet, margins are under pressure, sliding from 15 percent in 2022 to an expected 6 percent by the end of 2025. UAC believes it can improve these margins, pointing to its success with UAC Foods. They took UAC Foods’ operating margin from 1 percent in 2022 to a projected 15 percent in 2025.

UAC set up UAC Food and Beverage Company Limited (UFB), a special purpose vehicle, to acquire CHI. No immediate plans exist to merge CHI into existing subsidiaries. CHI Limited remains a separate entity for now.

Interestingly, most of CHI’s leadership stayed on after the deal. Six of eight leaders were retained. UACN’s GMD is now Chairman, and UACN’s Group Finance Director is now CFO.

Ultimately, the UACN and CHI union is a significant shift in Nigeria’s consumer goods sector. UAC gets CHI’s popular brands like Hollandia, Caprisun, and Chivita, while CHI gets UAC’s reach. Together, they control over 26 brands. This is a company to watch.

Keywords: UAC Nigeria, CHI Limited acquisition, Nigerian consumer goods, UACN financial performance, CHI revenue growth, Nigerian food and beverage, UAC debt refinancing, UAC EBITDA increase