Abraaj Capital closes largest private equity transaction in history of Middle East and North Africa
Abraaj Capital, the premier investment firm specialising in private equity investment in the Middle East, North Africa and South Asia (MENASA) region, announced today the closing of the largest private equity acquisition in the history of the Middle East and North Africa.
Abraaj Capital’s US$1.41 billion leveraged buyout (LBO) acquisition of 100 per cent of the shares of Egyptian Fertilizers Company (EFC), a private joint stock company and one of Egypt’s largest private-sector fertilizer manufacturers and exporters, was made by the firm through its Infrastructure and Growth Capital Fund (IGCF) and Abraaj Buyout Fund II (ABOF II).
Dubai Capital Group (DCG), the regional asset management arm of Dubai Group, Saudi-based Rashed Al Rashed & Sons Group and other prominent regional firms have co-invested in this historic transaction. Together with Abraaj Capital, these strategic partners will pursue further growth opportunities in this fast-growing sector across the Middle East and Africa. Mustafa Farid, Chief Executive Officer of DCG, will join Abraaj representatives on the Board of EFC.
Deutsche Bank acted as advisors and provided the acquisition finance for the EFC transaction.
EFC was established in 1998 as a free-zone joint stock company in the Northwestern Suez Economic Zone, near Egypt’s Sokhna Port. The company, which operates two factories and employs approximately 600 staff, distributes its products worldwide. EFC’s main products are granulated urea and liquid ammonia, nitrogen-based fertilizers that are widely used in the agricultural industry in Egypt and abroad. Especially in the United States and Europe, demand for urea is increasing as a result of expanded production of biofuels such as ethanol.
Sheikh Abdulrahman Ali Al Turki, Chairman of Abraaj Capital, said: “The region is witnessing unprecedented growth in both foreign and domestic investment. The acquisition of EFC exemplifies our confidence in Egypt’s increased attractiveness as an investment destination. Rising levels of regional cross-border capital flows are leading to greater economic integration and an even stronger MENA economy.”
Arif Naqvi, Vice Chairman and Chief Executive Officer of Abraaj Capital, said: “The size and scope of this transaction represents a landmark for the region and the private equity industry here. EFC is one of the most efficient firms in the high-growth global fertilizer industry. With state-of-the-art manufacturing facilities, an experienced management team, and competitive labour and production costs, EFC will continue to lead the sector in Egypt, while also increasing its international reach.”
He continued: “Today’s announcement signals Abraaj Capital’s ongoing commitment to the economic development of Egypt, following our landmark investment in Cairo-headquartered EFG-Hermes last year.”
In September 2006, Abraaj became the single largest shareholder in leading investment bank EFG-Hermes by way of a capital increase bringing Abraaj’s own issued share capital to US$1 billion. Abraaj Capital is today one of the largest foreign investors in Egypt.
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