UAE’s Gulf Cap­i­tal may sell some in­vest­ments

Kuwait Times - - BUSINESS -

Pri­vate eq­uity firm Gulf Cap­i­tal plans to sell some of its in­vest­ments to­wards the end of 2017 and early 2018 as mar­ket sen­ti­ment and the re­gional econ­omy im­prove, its chief executive said.

Karim El Solh de­clined to say which stakes the Abu Dhabi-based com­pany, one of the big­gest pri­vate eq­uity firms in the re­gion, was con­sid­er­ing of­fload­ing but said that they would be ap­peal­ing to global strate­gic buy­ers. Sources fa­mil­iar with the sit­u­a­tion said Gulf Cap­i­tal’s stake in Egyp­tian med­i­cal firm Tech­noS­can and its re­main­ing stake in util­ity business Metito Hold­ings were both for sale.

“Re­gion­ally, over the next two years, as the mar­ket comes back and economies re­cover, we will con­sider some re­gional ex­its,” El Solh said in an interview. “I can see the ex­its com­ing more to­wards the end of 2017 and early 2018 as the re­gional mar­kets re­cover and in­vestor sen­ti­ment comes back,” he said. Economies in the Gulf have been hurt by the slide in oil prices since the mid­dle of 2014, which has hit spend­ing by gov­ern­ments de­pen­dent on en­ergy rev­enues and sapped con­sumer con­fi­dence. Economists think re­gional growth could re­bound slightly in 2017, on the as­sump­tion oil prices pick up.

De­spite the slow­down in growth, merger and ac­qui­si­tion ac­tiv­ity in the Gulf has been rel­a­tively brisk in 2016 as the low oil prices have pushed fam­i­ly­owned busi­nesses to spin-off as­sets and state-linked com­pa­nies to consolidate. No­table deals in­clude Gulf-based Adep­tio’s ac­qui­si­tion of a 67 per­cent stake in Kuwait Food Co (Amer­i­cana) from a wealthy Kuwaiti fam­ily for about $2.35 bil­lion, and the merger of Abu Dhabi’s two largest banks, Na­tional Bank of Abu Dhabi and First Gulf Bank, in a deal due to be com­pleted early next year.

Gulf Cap­i­tal said this month it had ac­quired a con­trol­ling stake in Sporter.com, an on­line re­tailer of sports and nu­tri­tion supplements in the Gulf re­gion, while it bought Saudi Ara­bian food and drinks dis­trib­u­tor Multibrands in May. Once Gulf Cap­i­tal’s in­vest­ments reach the five-year mark, the firm starts to ac­tively plan for a sale, El Solh said. “We are hope­ful that we will be able to close some in­ter­est­ing global ex­its in the near fu­ture de­spite the soft re­gional eco­nomic en­vi­ron­ment,” he said.

“Some of our com­pa­nies with a global ge­o­graphic foot­print, a fast growth rate and a large di­ver­si­fied cus­tomer base will be ap­peal­ing to global strate­gic buy­ers.” Gulf Cap­i­tal ac­quired its stake in Dubaibased Metito in 2006 and the com­pany has es­tab­lished it­self as the largest pri­vately owned wa­ter group in the Mid­dle East, with a fo­cus on de­vel­op­ing mar­kets. In July 2014, it sold 32 per cent of the com­pany to Ja­pan’s Mit­subishi Cor­po­ra­tion and Mit­subishi Heavy In­dus­tries, leav­ing it with a 23.8 per cent stake. In Novem­ber 2009 it pur­chased a 75 per­cent hold­ing in Tech­noS­can, the largest chain of med­i­cal di­ag­nos­tic imag­ing cen­ters in the Mid­dle East. —Reuters

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