M’Sharie private placement oversubscribed by 100%
Dubai Investments has divested 40% of its shareholding in M’Sharie, its private equity arm, via a private placement targeted towards selected strategic investors across the GCC. The private placement was oversubscribed by more than 100%.
Valued at AED 1 billion, M’Sharie is the leading corporate private equity firm in the UAE and holds ownership interest in 16 companies operating in diversified businesses, of which 14 are majority or fully owned subsidiaries and 2 are joint venture affiliates. The divestment of M’Sharie will allow Dubai Investments to raise a capital of AED 400 million.
Commenting on the divestment, Khalid Kalban, MD & CEO of Dubai Investments, said, “The private placement of M’Sharie is a strategic move aimed at establishing a strong presence for the company within the GCC market and ensuring its continual growth by offering shareholding to a select group of investors from UAE & GCC.”
“By divesting a minority stake, we put ourselves in a better position to enhance M’Sharie’s performance through the introduction of commercial relationships from new shareholders, and form strategic alliances that could significantly boost the expansion of M’Sharie’s acquisition activities to other GCC countries,” Kalban added.
Regional investors who have acquired an equity stake in M’Sharie as part of the private placement include National Bonds Corporation (UAE), Gulf International Bank (Bahrain), Al Mal Capital (UAE), The First Investor (UAE), Al Arif Investment (UAE), Abdulaziz Alajlan Sons (KSA) and Ali Bin Hassan Dayekh (Dammam).
The legal formalities are expected to be completed by the end of September; thereafter, a new Board of Directors will be constituted for M'Sharie.
Gulf International Bank were the placement agents for the deal, and were responsible for advising DI on the structure of the placement process as well as on conducting the financial due diligence of M’Sharie and its group companies. Clyde & Co. were the legal consultants.
Referring to the overwhelming investor response to the shareholding offer, Kalban said, “The massive oversubscription of the private placement reflects the credibility that M’Sharie has built within Gulf markets as a successful investment firm. We look forward to working closely with the new shareholders and build upon the strong foundations of M’Sharie to reinforce its position as the premier private equity firm in the GCC region.”
M’Sharie has a consistent track record of growth and profitability. Between 2004 and 2007, the company achieved a Compounded Annual Growth Rate (CAGR) of 28% in total revenue and 62% in net income of portfolio companies. M’Sharie boasts unrivaled access to quality investment opportunities through its extensive industry experience as well as through the network of its management team and that of Dubai Investments. The company is constantly targeting new investment opportunities for expanding its investment portfolio.
M’Sharie’s investment strategy of acquiring companies with growth potential at attractive valuations is demonstrated by its excellent track record of investments, which has resulted in a robust return on equity (ROE).