Abraaj closes $1.41bn EFC acquisition

Abraaj Capital CEO Arif Naqvi.

Gulf private equity giant Abraaj Capital has announced the closing of the largest private equity acquisition in the history of the Middle East and North Africa.

The firm's $1.41bn leveraged buyout acquisition 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 Abraaj through its Infrastructure and Growth Capital Fund (IGCF), and Abraaj Buyout Fund II (ABOF II).

"The fertilizer industry is like the cement industry was four years ago - there is immense potential there," Arif Naqvi, CEO of Abraaj, told Arabian Business. Naqvi added that Abraaj was in talks with "one or two" other fertilizer firms in the region, with a view to increasing Abraaj's platform through further acquisitions.

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 the transaction. Mustafa Farid, CEO of DCG, has joined Abraaj representatives on the board of EFC. Meanwhile, Deutsche Bank acted as advisors and provided the acquisition finance for the EFC transaction.

"This is a clear example that private equity firms in the region can do the mega-deals effectively, at the best price for our investors," continued Naqvi. "We are defining the meaning of ‘private equity' in the region."

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."

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic. Arabian Business would like to point out that only comments relevant to the story will be published. Any containing personal insults or inappropriate language will not be approved.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM