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Thursday, 15 September 2022

One more Gulf acquisition in the bag + Kuwait’s sovereign fund joins the party

When one Gulf acquisition wraps, another one opens: Abu Dhabi Ports (ADP) finalized its takeover of a major local shipping and logistics outfit — and the Kuwaiti Investment Authority (KIA) took a leaf out the book of its Gulf sovereign fund neighbors, buying a 4.8% stake in EGX-listed Rameda Pharma.

ADP’s majority acquisition of IACC is final: Abu Dhabi Ports (ADP) has completed its first international acquisition, buying a 70% stake in local shipping and logistics firm International Associated Cargo Carrier (IACC) for AED 514 mn (USD 140 mn), it said in a statement (pdf) on the Abu Dhabi stock exchange yesterday. The transaction was first agreed in July, with the company at the time saying it would be funded from its reserves of more than AED 3 bn (USD 816.7 mn).

What ADP got: IACC Holdings is an investment company that focuses on shipping and logistics, founded and led by our friends at El Ahwal family. It is the sole owner of Egypt-based shipping firm Transmar and terminal operator Transcargo International (TCI) and also owns two other shipping companies, Safina and IACC Logistics, according to its website. Transmar and TCI are on track to deliver combined revenues of around USD 137 mn and EBITDA of USD 65 mn in 2022, according to the statement.

No changing of the guard: The Ahwal family and its executive team will continue to manage Transmar and TCI “under the guidance and support of the board and in conjunction with [ADP],” the statement confirmed.

This isn’t the first time ADP has called at our ports: The company has so far this year signed several contracts with port authorities and the Transport Ministry to build and run multi-purpose terminals in the Safaga and Ain Sokhna ports, cruise ship berths and terminals in various Red Sea ports, and a river port in Minya. ADP is majority-owned by Abu Dhabi sovereign wealth fund ADQ, which bought 32% of Alexandria Container & Cargo Handling as part of its USD 1.8 bn investment in five EGX-listed companies in April. ADQ also acquired our friends at SODIC, the upmarket developer, in a blockbuster transaction nearly a year ago.

Advisors: Transmar and TCI had EFG Hermes (pdf) acting as the exclusive financial advisor and White & Case as counsel. KPMG acted as the financial advisor to ADP, while PwC acted as the buyer’s commercial advisor and Matouk Bassiouny and Hennawy as its legal advisor.

KIA buys stake in Rameda: The Kuwaiti sovereign wealth fund acquired a 4.81% stake in Rameda Pharma yesterday, Hapi Journal reported. The transaction was made by Ekuity Holding, a subsidiary of the Kuwait Investment Authority (KIA), which according to data published by the EGX (pdf) purchased 48.14 mn shares at EGP 3.00 apiece. This is a 12% premium to Rameda’s closing share price on Tuesday.

Who’s the seller? Sources told the newspaper that a “Swedish asset manager” sold its shares, without disclosing its identity. Publicly available data suggests that Swedbank Robur Fonder, holds a 4.81% stake in the company.

Advisors: EFG Hermes brokered the transaction.

Kuwait joins the Gulf investment party? Gulf sovereign funds have been piling into Egypt after GCC countries pledged more than USD 22 bn in direct investment to help the country weather global economic headwinds. While Kuwait wasn’t part of those pledges, some analysts had said it could pitch in with up to USD 2 bn. The Saudi and Abu Dhabi funds have spent more than USD 3 bn to snap up holdings in big-name EGX-listed firms this year. The Saudi wealth fund also recently bought an 11.0% stake in Rameda over two transactions.

Ekuity has had expansion plans here since before 2022 went to hell: Last year, the company said it was eyeing acquisitions of minority stakes in four to five food and pharma companies in Egypt over the following two years. The KIA subsidiary, which owns close to 50% of local lender AAIB, acquired 30% of Egypt’s Nile Aluminum and Metals Company (AluNile) back in 2019.

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