Network International LLC, the leading independent payment solutions provider in the Middle East and Africa region and Abraaj Capital, the largest private equity group in the Middle East, North Africa and South Asia (MENASA) region, announced today the signing of a partnership agreement to enhance Network International's strong growth and accelerate the geographic expansion of the company's market-leading payments processing platform.
Under the terms of this agreement, Abraaj Capital through Abraaj Financial Technologies Holdings Limited will acquire a 49 per cent stake in Network International for a price of around AED 2 billion (USD 539 million), which includes a sum contingent upon attainment of profitability targets and a portion financed by Emirates NBD as is normal in such transactions.
Following the signing today of the agreements, which are subject to relevant regulatory approvals, the acquisition is expected to be finalized in the first quarter of 2011.
Network International, a wholly owned subsidiary of Emirates NBD, a leading bank in the region, currently serves around 70 banks and financial institutions in the region and more than 17,000 individual merchants represented in over 28,000 outlets using around 45,000 point of sale machines in the region. The company offers its customers products and services in both the issuing and acquiring segment of the payments industry in the Middle East and Africa. The company also manages one of the region's most extensive ATM networks, currently exceeding 700 ATMs.
Network International has also established merchant acquiring and processing partnerships with leading global networks, such as American Express, China UnionPay, Diners Club and JCB. In addition, Network International provides extensive consultancy services, including planning, designing and developing new software and services for the payment industry.
The investment in Network International will be the inaugural transaction made through Abraaj's flagship fund, Abraaj Buyout Fund IV, which seeks to generate medium to long-term capital appreciation by acquiring control-themed interests in established businesses across the region, with a primary focus on the Gulf Cooperation Council states, North Africa, Turkey, South Asia, and the Levant.
"Led by an experienced management team and benefiting from the strength of its founding shareholder, Emirates NBD, Network International is a regional leader in its industry and is well-positioned as a platform for sustained future growth," said Mustafa Abdel-Wadood, Managing Director and CEO, Abraaj Investment Management.
"Given its wide footprint across the entire value chain of transaction processing services," Abdel-Wadood added, "Network International is ideally positioned to take advantage of the continuing shift from cash-based to electronic transactions and to capitalize on the massive growth potential of the region in light of the current under-penetration of payment cards."
"Today, Network International is at the forefront of the regional trend towards electronic payments," said Abdulla Qassem, Chairman of Network International. "We believe that through its continued investment in technology, people and customer relationships, Network International will build on its history of innovation and industry leadership, expanding into new markets and consolidating its status in existing ones."
Qassem added: "We look forward to leveraging Abraaj Capital's significant M&A and domain expertise and deep regional network to grow the franchise in the years ahead."
"Network International provides a unique platform opportunity to consolidate the highly fragmented payment processing sector in MENASA at a regional level as well as to offer outsourcing services to financial institutions at a world-class standard," said Matteo Stefanel, Partner, Abraaj Investment Management.
Stefanel added: "Network International has demonstrated a track record of innovation through products such as the iVestor card and continues to deliver leading-edge solutions, cementing its extremely strong position in the region. We look forward to working with the management of Network International to build on the company's past successes and to grow it into a global leader."
Ramkumar Chari, CEO Network International said: "We are delighted to welcome Abraaj Capital as a strategic partner and shareholder in Network International."
Chari commented further: "Abraaj Capital's track record of helping to bring regional leaders to a truly global level, and Network International's domain expertise will together assure NI continued success into the next level of its growth."
Emirates NBD was advised by Morgan Stanley & Co. International plc (DIFC Branch) and Dewey & LeBoeuf, and Abraaj Capital by FT Advisors and Allen & Overy.
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