BYRNE GROUP EYES NEW ACQUISITIONS AND MULLS SUKUK

▶ Equipment rental firm plans expansion in Asia and Africa after deal with Hong Kong investment fund

Byrne Equipment Rental, a Dubai-based equipment rental company servicing the construction, industrial, oil and gas and events industries, is in advanced talks to acquire two GCC companies.

It is also eyeing a clutch of other deals as it ramps up expansion plans following a Dh1 billion buy-out led by its chairman this week.

“In the past two-to-three years we have seen sustained profitability in some markets and average [annual] growth of 25 per cent, and I am very positive about the year ahead,” Byrne’s chairman and chief executive Hamad Al Sulaiman told The

National. “We don’t really have competition in the region.”

Byrne considers itself a “onestop shop” for equipment rental in the GCC, from temporary buildings for events and construction sites to industrial equipment and power generation facilities.

It runs operations from its 17 plants and depots across the UAE, Oman, Bahrain, Kuwait, Qatar and several locations in Saudi Arabia, including Makkah, Jeddah, Riyadh and Turaif.

Yesterday, Saudi Arabia’s Mr Sulaiman’s Itqan Investments, together with Tamar VPower Energy Fund, a vehicle jointly managed by Hong Kong power company VPower Group International, and Citic Pacific, the overseas arm of a diversified Chinese conglomerate, acquired Byrne Equipment Rental in a Dh1bn deal.

The deal incorporates other businesses within the Byrne Group, including Spacemaker, Byrne Technical Services and Byrne Medical Equipment Rental. It brings Byrne’s total headcount to 1,500 staff, and this is expected to grow to 2,500 in the next two years.

“The acquisition will support Byrne’s plans to grow into the Asian market and replicate the success the company has achieved in the GCC region,” Mr Al Sulaiman said.

The Asian shareholders’ expertise in the mega-power (engine-based electricity generation) industry will also help Byrne expand into the GCC’s mega-power sector.

One of the firms targeted for acquisition this year is in the solar power sector and the other is in oil and gas, Mr Al Sulaiman told The National.

He said the group is in early stage talks with other companies from the region and there is no limit to the size of any deal struck – provided the acquisition complements and adds value to Byrne’s activities.

The group has capital in place for the next two-to-three years, but may consider a sukuk issue to finance the planned growth of its business in the medium term, in particular two mega projects it is bidding on at present. “We are under-leveraged, so funding is widely available to us,” the chairman said.

Asia is the key target market for an expanded Byrne Group, as it looks to capitalise on an increasing number of major projects under development on the continent as well as high forecast growth, particularly in China.

There are also plans to enter Africa in the coming years, particularly Egypt and Kenya, where there are sizeable oil and gas industries, Mr Al Sulaiman said. The group wants to expand its activities in the oil and gas equipment rental sector.

In the GCC, Byrne plans to commence operations in a further region of Saudi Arabia, Jubail. Expansion into Europe is not on the cards – other than Eurasian markets with sizeable oil and gas industries such as Azerbaijan – according to the chairman, because the equipment rental market is already competitive.

“We are bringing the operating lease model to the region,” he said. “In Europe, roughly 80 per cent of all utilised equipment is either leased or rented, so there’s not much we can do there. In the GCC it’s not more than 8 per cent, and in the wider Middle East it is much lower than that.”