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|| UAE investors Abraaj and Gulf Capital invested in South African and Egyptian firms

gulfcapital abraajDubai investment firm Abraaj Group and Abu Dhabi investment firm Gulf Capital have invested separately in a South African food manufacturer and an Egyptian oil services firm.

Gulf Capital, based in Abu Dhabi, has invested $25 million in Amak Group, a provider of integrated petroleum services for the onshore and offshore sectors in Egypt. Abraaj Group, based in Dubai, has invested in South African food manufacturer Libstar which is located in five of South Africa’s nine provinces and employs about 4,200 people.

Abraaj Group and Gulf Capital are listed in the Middle East Investors Directory with the code OR01 and OR26 respectively.

More details follows:

The Abraaj Group (‘Abraaj’ or ‘The Group’), a leading investor operating in global growth markets, today announced the acquisition, through its Funds, of a majority stake in Liberty Star Consumer Holdings (‘Libstar’ or ‘the Company’), one of the largest unlisted food and personal care manufacturers in South Africa. Abraaj completed the buyout of Libstar from its existing shareholders including Metier, Old Mutual Private Equity, Development Partners International and Lereko.

Established by Metier, Andries van Rensburg and Robin Smith in 2005, Libstar and its subsidiary companies manufacture a broad range of quality private label and own-branded products for the rapidly growing South African food, fast-casual dining, household and personal care markets. The Company’s range of products cover cheeses, sauces and condiments, packaging supplies, baking aids, herbs and spices, beef and chicken products, pasta, imported European deli products, confectionery snacks, and detergents and washing powders. Some of Libstar’s most prominent customers include McDonald’s South Africa, Woolworths, Shoprite, Pick n Pay, Spar and Tiger Brands.

Libstar operates nationally through 23 business units located in five of South Africa’s nine provinces and employs about 4,200 people with nationwide manufacturing, supply and distribution capabilities. Since its inception, Libstar’s industry-experienced management team has pursued a successful buy and build strategy, growing and diversifying its product offering. Libstar’s key business units include Cape Herb and Spice which is the primary provider of private label spices, Finlar, the sole and exclusive provider of beef and chicken products to players in the QSR sector, Lancewood Holdings, a prominent manufacturer of soft cheese in South Africa, Rialto, the exclusive supplier to leading retailers of imported food products from Asia and Europe, and Dickon Hall, the leading producer of condiments in South Africa

The acquisition of Libstar represents an attractive investment opportunity for Abraaj given the large, non-cyclical markets and industries that Libstar targets. The US$ 56 billion South African grocery retail market and US$ 14 billion food services market are estimated to grow at 7% and 9.5% per annum respectively to 2018. Furthermore, the Company’s private label manufacturing, supply and distribution business has strong organic growth potential given Africa’s low market penetration rates for private label products as well as the rising popularity of fast-casual dining across the continent.

This transaction is a further demonstration of Abraaj’s focus on investment opportunities arising from the growth of large consumer and middle classes across its target markets of Africa, the Middle East, Turkey, Asia and Latin America. Abraaj will continue with financial and operational support to Libstar’s pan-African growth strategy which includes the introduction of new product lines and the upgrade and expansion of existing Libstar plants. Abraaj will continue to support Libstar’s successful buy and build strategy across South Africa as well as in Sub-Saharan Africa.

Davinder Sikand, Partner and Head of Sub-Saharan Africa for The Abraaj Group, commented: “The acquisition of Libstar represents another exciting African investment partnership for us. Metier, along with the Libstar management team and employees, has built an impressive market position as one of the leading manufacturers and providers of high-quality products and services to the African foods service and retail industry. We look forward to adding our deep experience in helping accelerate the growth of our numerous FMCG and food businesses, not only across Africa but from our other growth markets as well.”

Sandeep Khanna, Managing Director at The Abraaj Group, added: “In partnership with Libstar’s management team who have reinvested substantially, we believe we can help transform the company to become a truly pan-African leader in the food and retail services market. The market opportunity for food and other consumer staples in Africa promises huge potential for growth, driven by rapidly changing trends in consumer tastes and demand, as well as ongoing developments within the FMCG industry itself, such as the increased use of private labels.”

Thierry Dalais, Executive Chairman of Metier, said: “Libstar’s strategy originated in 2005 when we, along with Andries van Rensburg and Robin Smith, articulated an ambition to create and grow Libstar. We have been integrally involved in Libstar’s development and today are proud of what has been achieved. As private equity investors there comes a time when we need to pass the baton on and trust that Abraaj will run hard and be worthy owners of the business. We wish them all the very best.”

Andries van Rensburg, Chief Executive Officer and Robin Smith, Commercial Director of Libstar, added: “We are very proud of the success Libstar has achieved over the last decade and would like to record our appreciation of the support we have received from our partners, Metier, Development Partners International, Lereko and Old Mutual Private Equity. We are confident of jointly executing on the next phase of our pan-African strategy with Abraaj and look forward to this exciting stage in the company’s growth trajectory”.
- See more at: http://www.abraaj.com/news-and-insight/news/the-abraaj-group-invests-in-leading-south-african-fmcg-manufacturer-liberty/#sthash.Dn4ONsiT.dpuf


Gulf Capital, one of the leading and most active alternative asset managers in the Middle East, has successfully completed a US$ 25 million investment in Amak Group (“Amak”) through its regional Fund, “Gulf Credit Partners”. Amak is a leading provider of integrated petroleum services for the onshore and offshore sectors in Egypt, and offers drilling and workover services to national and multinational oil companies. Gulf Credit Partners is the credit and mezzanine business of Gulf Capital which provides financing and growth capital to fast growing companies in the Middle East, North Africa and Turkey (MENAT).

Dr. Karim El Solh, Chief Executive Officer of Gulf Capital, said: “Gulf Credit Partners’ investment will help Amak continue its strong growth at an exciting time for Egypt’s revitalised oil & gas sector. Amak’s strong position in the Egyptian oil and gas service sector, as well as its ambitious growth strategy and experienced management team, are strongly aligned with our Fund’s investment strategy. Gulf Capital is proud of demonstrating its confidence in the Egyptian economy by making several investments in Egypt this year through both its private equity and credit businesses.”

Underinvestment in Egypt’s upstream segment over the last three years has held back growth and seen domestic consumption catch up with production. Oil demand is expected to increase from 34.8m tonnes oil equivalent (toe) in 2013 to 45.5m toe in 2020. Over the same period, it is estimated that shortage of hydrocarbons in Egypt will grow from 657000 barrels oil equivalent (boe) per year to 28.2 million boe/year.

An improving outlook with regards to political stability in Egypt has improved investor sentiment and encouraged investment in the country’s oil & gas sector. In its attempt to bridge the supply-demand imbalance, the Egyptian government has taken steps to attract further investment to this strategic sector. In particular, the government has reached an agreement with foreign oil firms to pay off all of its arrears by 2017. This strategy already appears to be paying dividends, with the latest auction of 22 oil & gas exploration concessions drawing substantial interest from international oil multinationals. Amak, as a leader in integrated petroleum services in Egypt, is ideally positioned to benefit from the recovery and growth in the Egyptian upstream oil and gas sector.

Ayman Abbas, founder of Amak, said: “This institutional investment from Gulf Capital will strengthen Amak’s capital structure, allow us to fund the rapid growth of the Company and help improve overall corporate governance, all vital components to the continued success of Amak. We are glad to partner with such a leading alternative asset manager in order to achieve our ambitious growth plans.”

Walid Cherif, Managing Director of Gulf Credit Partners stated: “We are delighted to team up with Amak, which has achieved significant growth over the last years to become a main player in upstream oil & gas services in Egypt. We are also thrilled with this seventh investment of the Fund and its success in deploying over 70% of its capital in thriving and fast growing businesses. Our investment in Amak represents a new milestone for the Fund as we further diversify our portfolio by geography and industries. Gulf Credit Partners is today invested in some of the fastest growing and most defensive industries across the region, including healthcare, education, power and oil and gas services.”

Dr. Mohamed Farouk, Chairman and CEO of Amak said: “Gulf Capital has shown great flexibility in tailoring a unique financing solution that meets our strategic growth needs. This institutional investment will assist Amak in achieving its target of becoming the leading provider of integrated oil & gas services in Egypt”.

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