Barkaat Foods, a Chicago-based, Zabiha Halal protein processor, recently announced that it secured a Shariah-compliant credit facility from FirstMerit Corporation (FirstMerit) and Prairie Street Capital with the help of Sikich Investment Banking (Shariah law is the moral code and religious law of Islam). Barkaat will use this capital to expand its existing operations and develop new product lines. Barkaat expects to double its current staff of 40 people in the next year.
Barkaat, located on the stretch of Chicago's Halsted Street. once famous for its Union Stock Yards, produces lamb, goat, veal and now beef that staff slaughter and process in compliance with strict Zabiha Halal (the Islamic method of slaughter) standards.
According to the Pew Research Center, the world's Muslim population is expected to increase by roughly 35 percent in the next 20 years – almost double the growth rates projected for non-Muslims. In the U.S. alone, the increasingly diverse Muslim population is expected to double over the same time period. As consumer demand rises and more institutions – including schools, hospitals and workplaces – must accommodate religious dietary restrictions, Barkaat serves a rapidly growing and underserviced market for authentic Halal cuisine, with both its production business as well as its catering offerings.
Shariah-compliant funding brings unique challenges to a company that wants to secure financing, largely due to restrictions on interest-bearing instruments (or "Riba"), which make debt financing difficult. Sikich Investment Banking facilitated a solution known as Murabaha Financing by structuring a partnership between FirstMerit, a $25 billion diversified financial services company, and Prairie Street Capital, a Chicago-based boutique investment firm.