MENA region witnesses successful fiscal year as transaction value in private equity activity surpasses 2009 figures

MENA region

The Middle East & North Africa (MENA) region recorded increased activity in private equity as the value of deals rose. The value of the deals concluded in 2010 totaled US$993 million, compared to the US$680 million in 2009. Industry analysts from Al Masah Capital cite an improvement in the global economic environment as the catalyst for growth in regional private equity. 

The UAE emerged as the regional leader, in terms of the number and value of deals brokered, as it finalized six private equity deals, valued at US$816.5 million. Abraaj Capital was the primary reason for the UAE’s success, as it finalized the regions most valuable deal, worth US$554 million. The deal sees Abraaj Capital acquire a 49% stake in Dubai-based Network International LLC, a subsidiary company owned by Emirates NBD, through Abraaj Financial Technologies Holdings Limited. 

Saudi Arabia, Egypt and Jordan each recorded five deals, however in terms of deal value, Jordan’s US$109.8 million dwarfed Saudi Arabia and Egypt’s US$20 million and US$8.5 million, respectively. Among other countries, Kuwait and Lebanon concluded three deals each, while Tunisia and Bahrain witnessed the completion of one deal. 

The most popular sector for private equity investment was Information Technology, with seven deals, while the Media and Consumer related sectors saw the completion of four deals each. The Health sector witnessed three deals. 

Global Capital Management was the only company to record exit transactions, where it sold its investment in DEPA Limited, one of the world’s leading interior design companies. Moreover, Global Capital Management sold its investment in the Evergrande Real Estate Group. Upon exiting its investments, Global Capital Management documented a 23% and 35% return on its investments from the DEPA Limited and Evergrande, respectively. 

The MENA region witnessed twenty initial public offerings (IPO) and raised a total of US$2.7 billion in the last fiscal year. Saudi Arabia has the largest number of IPO listings in the region with nine, followed by five in Tunisia and two in Egypt. Despite only securing one IPO listing throughout the year, Oman’s Omani Qatari Telecommunications Company raised the regions highest with US$474.6 million. Bahrain’s Aluminium Bahrain raised the second largest sum with US$389.8 million. 

The MENA region aimed to fundraise approximately US$3.8 billion through 11 announced funds. Abraaj Capital’s Abraaj-Riyada Enterprise Development (RED) Growth Capital (SME) Fund was the most ambitious in its fundraising attempts with a target of US$700 million. Three funds, Al Masah MENA Growth PE Fund, ARC Real Estate Income Fund and DB Masdar Clean Tech Fund were hopeful of raising a total of US$500 million each.