Abraaj Capital sells its majority stake in Septech Holdings Limited at significant profit
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 sale of its majority stake in Septech Holdings Limited, generating a 39 per cent internal rate of return (IRR) over a three-year holding period. The Abraaj stake, which was acquired through the Abraaj Buyout Fund (ABOF) in 2004, was sold to David Heffernan, Septech founder and Chief Executive Officer.
Founded in 1997 and headquartered in Sharjah, UAE, Septech’s main activity was concentrated on packaged wastewater systems in 2004, at the time of acquisition. Today, Septech is active in water and wastewater related systems, products and services, including water and wastewater treatment, landscaping and environment, pre-cast concrete products and marinas. Its activities span consultation, design, manufacturing, installation, operation and maintenance.
Septech has focused on achieving significant penetration into regional markets through tie-ups with strategic partners and the introduction of new products and services. For the six-month period ending June 2007, Septech posted a 114 per cent increase in revenues compared to the same period last year.
Arif Naqvi, Vice Chairman and Chief Executive Officer of Abraaj Capital, said: “In 2004, Septech was an attractive acquisition candidate due to its profitability, significant market potential, operational strength and exceptional management. Three years later, we are extremely pleased to have been able to position this company for further growth – and to have generated such a significant IRR for our investors. We wish the company and David Heffernan great success in the future.”
He continued: “This exit follows the extremely successful exits for ABOF of ONIC Holding (84% IRR), Aramex (68% IRR) and Amwal (101% IRR). We are delighted to continue the extremely healthy performance of the fund and expect to have divested from its remaining portfolio by 2008, making it a six-year cycle of completion at very profitable terms to all our investors, in line with the best performing funds globally.”
Rapid population growth, water shortages, increasing environmental awareness and congestion in the main municipal sewage networks mean that wastewater treatment is a vital requirement in the Gulf region. With its proprietary technology and years of experience, Septech is ideally placed to continue to deliver value-added solutions to the wastewater treatment and disposal challenges faced across the region.
“The ownership by Abraaj Capital was a natural step in Septech’s evolution that aided the company’s plans to expand beyond the UAE, and then to accelerate that growth across the region,” said Heffernan. “We are now serving clients in Oman, Qatar and Saudi Arabia as well as being involved in major UAE projects, including the Palm Atlantis, Festival City Marina, Al Qarsana Island and Dunes Golf Course. Three years after Abraaj first invested in Septech, we are a stronger, more profitable, pan-regional organisation.”