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Tuesday, 10 January 2023

Compass Capital cleared to do due diligence on Pachin. Plus: Speed Medical, ICMI make M&A headlines

Yesterday in M&A: Compass Capital got the green light to do due diligence on Egypt’s most sought-after paints company, Speed Medical is considering selling its stake in Speed Hospital in Obour, and ICMI is looking at a number of acquisitions in the textiles and medical sectors.


EGX-listed Paint and Chemical Industries (Pachin) will allow Compass Capital to do due diligence, Pachin said in a disclosure to the EGX (pdf) yesterday. The news comes just days after Compass submitted a bid to acquire a majority of Pachin’s shares.

The bid: Compass last week became the fifth company to bid for Pachin with an offer to purchase 51-90% of the paint manufacturer at EGP 30 a share. The offer is the highest Pachin has so far received, valuing the company at EGP 720 mn.

Other bidders include Eagle Chemicals, which last month offered to pay EGP 29.50 a share for the company, and the UAE’s National Paints Holdings, which offered EGP 29.00 a share. Pachin has not yet responded to the NPH offer, but is expected to do so later this month. Both Universal Building Materials and Chemicals (Sipes) and Saybad Industrial Investment dropped their bids after Pachin turned them down for undervaluing the company.

REMEMBER- The play for Pachin comes amid the government’s privatization push, which should see it reduce its involvement in or exit certain industries to make way for the private sector. Pachin is currently approximately 54% owned by state-owned companies and banks.

Advisors: Al Ahly Pharos is advising Pachin while Shalakany Law Office is counsel. Marei, Fayez, Dardiry & Partners is legal advisor to Compass Capital, which has not yet appointed a financial advisor.


ICMI shareholders to discuss Banff acquisition: Shareholders of the International Company for Medical Industries (ICMI) will discuss plans to acquire a 72% stake in Mansoura-based textiles company Banff Non Wovens at a general assembly meeting on 29 January, according to a disclosure to the EGX (pdf). The meeting will also look into allowing the board to finalize acquisitions of stakes in Alfa Medical, New Alfa, and Capital Investments after revising them, it said in a second bourse filing (pdf).

Why’s a company like ICMI interested in textiles companies? Banff produces materials used by the healthcare industry. Its non-woven fabrics are used for goods like masks, surgical gowns and sterilization wraps.

AND- Speed Medical could exit Obour hospital: Shareholders in diagnostics and healthcare firm Speed Medical will discuss selling down its stake in Speed Hospital in Obour in an extraordinary general meeting on 2 February, it said in a disclosure (pdf) yesterday. Speed was not available for comment by dispatch time this morning. Domestic media suggest speed owns 80.25% of the hospital.

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