EXCLUSIVE- DPI is doubling down on Kazyon: A consortium led by our friends at Africa-focused private equity firm Development Partners International (DPI) will invest USD 165 mn in supermarket chain Kazyon, according to a statement (pdf).

The details: The transaction will see the investors acquire a “significant minority stake” in the firm, DPI partner Ziad Abaza told Enterprise. DPI is writing the lion’s share of the ticket; the transaction includes both primary and secondary sales of shares, Abaza told us.

DPI knows Kazyon well: DPI has held a “significant minority stake” in Kazyon since last year when it invested USD 75 mn in the company, Abaza told us.

Who else is on board? UK development finance institution British International Investment and Africa-focused PE outfit South SuezCapital are among the institutional investors joining DPI in the transaction.

Where the money’s going: Kazyon will use the proceeds from the investment to expand its presence in Egypt by opening new stores, Abaza said. Kazyon is also planning to enter new markets outside the country’s borders, he added, without going into details because the plans have not been finalized.

Kazyon is a discount grocery retailer: Founded in 2014 by former EFG Hermes co-CEO Hassan Heikal, Kazyon sells a range of food and household products at competitive price points. The company now has more than 600 stores across 18 governorates and operates one of the largest customer loyalty schemes in the Middle East and Africa.

WHERE KAZYON FITS INTO DPI’S EGYPT STRATEGY-

The investment comes amid significant economic headwinds in Egypt, where a foreign currency crunch continues and headline inflation is now running at its highest level in almost six years, squeezing household budgets.

But DPI likes Egypt’s fundamentals:“We are long-term investors in Egypt and believe in the long-term fundamentals of the country,” Abaza said.

The firm is confident that Kazyon is well insulated from the economic pressures: “If you think about what the company does, it essentially tries to sell grocery products at the cheapest price possible. If anything, there’s more demand for this product than ever in Egypt given what’s happening from a macro standpoint,” Abaza tells us. Currency weakness is also unlikely to impact the company, he says: “Kazyon is not really a company that would be negatively affected by the devaluation because it doesn’t import.”

This is DPI’s second acquisition in Egypt this month: The firm acquired a minority stake in local pharma player Marcyrl alongside Amethis earlier this month, and has been on the lookout for further opportunities in defensive sectors in the country.

ADVISORS- Evercore Partners, Matouk Bassiouny & Hennawy, PwC and Baker Tilly acted as advisors for Kazyon. DPI was advised by White & Case and Debevoise & Plimpton.

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