There are lots of complaints about lack of exits in Middle East investment sector, but a Bahrain investment bank just announced a very healthy $300 million exit for its acquisition after just three years.
Seera Investment Bank, a Shari'a compliant investment bank headquartered in Bahrain, announced the sale of BWA Water Additives (BWA), a UK based company for $300 million to Berwind Corporation, a family-owned investment management firm based in Philadelphia. As we reported back in 2008, Seera had acquired BWA for $200 million. A very healthy exit post crisis.
Seera Investment Bank is listed in the Middle East Investors Directory with the code LIP10.
Seera Investment Bank B.S.C.(c), a Shari'a compliant investment bank headquartered in Bahrain, announced the sale of BWA Water Additives (BWA), a UK based company in a transaction valuing the company at around $ 300 million. The sale has generated a total return on investment of around 70% over a holding period of slightly over two and a half years with an IRR of around 20%.
BWA is the world-leader in the development and supply of specialty chemicals used for water treatment in 90 countries around the world. The company's new owner is Berwind Corporation, a US family-owned investment management company, with investments in a diversified portfolio of highly successful manufacturing and service companies.
Mr Asaad Al Banwan, Seera's Chairman of the Board said "We are very excited about the sale of BWA for a number of reasons. First, the company was acquired in late 2008, just prior to the financial crisis and to be able to generate returns of 70% during the time when most investments globally lost so much value, represents a great achievement for Seera. Second, this exit is a milestone for Seera as it completes the Bank's investment cycle which reaffirms Seera's expertise in judiciously acquiring, actively managing and successfully exiting international Private Equity investments."
Seera has a global outlook and a strategy of seeking investments with strong fundamentals which exhibit potential for growth.
Highlighting the value to Seera's investors and shareholders, Mr Al Banwan said "We are very pleased with the overall performance of Seera and its portfolio, both of which have shown resilience during the financial crisis. Management focused its attention during the crisis on managing its existing investments to ensure that they remain on track and avoid significant impairment in value. With this profitable exit we are already seeing the positive results of this strategy and the efforts of Seera's management team and are more confident about the future and the opportunities ahead." He further added, "We expect this exit to produce solid profits for our shareholders and to reaffirm the confidence that they have shown in Seera."
Mr Abdulla Janahi, Seera's Chief Executive Officer commented "Seera's interest in BWA was driven by our investment strategy to invest in companies with strong fundamentals, a strong management team, being in an industry which is not highly cyclical, and to have intrinsic capability for organic growth rather than significant dependency on add-on acquisitions. BWA's key fundamentals which attracted our interest was its leadership position in the fast growing and important water treatment sector and its strength in developing new products through an experienced management team with in depth knowledge in the water treatment industry. We believe that our focus on these fundamentals has paid off and generated impressive returns for Seera at a time of great market difficulties and over a relatively short investment period."
Mr Janahi added "From day one, Seera adopted a very prudent investment strategy and avoided focus on speculative sectors. Instead, our focus was on asset classes and investments which exhibit strong and sustainable growth fundamentals. We have a prudent investment process which ensures that our investments meet certain standards that allow us to create value for investors and shareholders at an acceptable level of risk."
On Seera's value addition, Mr Janahi explained "As indicated earlier, Seera is an active investor. We take a hands-on approach to managing our investments and work very closely with our portfolio companies. BWA was acquired just before the onset of the financial crisis and Seera worked in close partnership with company management to mitigate the impact of the crisis, restructure its balance sheet, and to grow its business. This exit which has generated an IRR of around 20% reflects the collective efforts of BWA management and active management by Seera in creating value during this exceptionally challenging investment holding period."
Seera has investments in the industrial manufacturing and transportation sectors in addition to smaller investments in the utilities and real estate sectors. The Bank's investment strategy is to maintain a diversified investment portfolio geographically and industry wise, focusing on sectors underpinned by strong fundamental demand, and to avoid speculation driven sectors.
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