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|| Gulf Capital acquired majority stake in e-commerce platform Sporter

gulf capital sporterAbu Dhabi private equity firm Gulf Capital has acquired majority stake in sport-based products and supplements marketplace Sporter.com.

Sporter.com's offering comprises some global nutrition brands and it is benefiting from the general surge of online shopping in the Middle East. (The value of the deal is not disclosed, but it is part of $135 million that Gulf Capital is investing in technology and e-commerce platforms).

Gulf Capital is listed in the Middle East Investors Directory with the code OR26.

More details follows

Gulf Capital, one of the largest and most active alternative investment firms in the Middle East, announced today that it has acquired a controlling stake in Sporter.com, the leading online retailer of sports and nutrition supplements in the GCC, operating in a rapidly growing sector of the digital economy. Sporter.com's operations are located in state- of-the-art facilities across multiple countries, which allows the company to provide a convenient, timely and price-effective service to customers in the Arab region.

Sporter.com's offering comprises some of the top global nutrition brands including Optimum Nutrition, BSN, Muscletech, Cellucor, Dymatize, Quest Bars, and Russian Bear, amongst others. The company is benefiting from the general surge of online shopping in the Middle East, particularly when it comes to buying sports and nutrition supplements online. Today, the share of online sales of sports and nutrition products in the GCC stands at 7% of the total market. It is expected to grow to 20% of the total supplements' sales in the next five years, in line with the levels in the United States.

Dr. Karim El Solh, Chief Executive Officer of Gulf Capital said: "The strategic investment in Sporter.com is an exciting one for Gulf Capital as it offers our investors exposure to both the rapidly growing digital economy and the booming sports nutrition sector in the GCC. The E-Commerce space in the Middle East is growing rapidlyat an estimated five-year CAGR of 21+%. Sporter.com has the lion's share of online sales of nutrition supplements in the GCC and gives us an unparalleled exposure to the booming ecommerce and the health and supplements sectors in the region. We look forward to working with the Sporter.com management team and to helping themcement and grow their position as the leading online destination for health and nutrition supplements".

The sports nutrition industry is expected to grow to US$52.5 billion in global sales by 2020, from US$ 30 billion in 2013. This trend is reflected in the region with annual growth expected to accelerate from its current 8.5% to an expected above-global-average of 20%. Drivers of this expansion include demographics, rapid urbanisation, high online connectivity, high disposable income, growing health awareness among consumers, and introduction of new ingredients in sports nutrition products and a growing trend for adopting a healthier lifestyle. According to a recent research published in the Gulf Medical Journal, around 40% of gym members in the UAE are also supplement users.

Abdullah Shahin, Managing Director, Private Equity at Gulf Capital, concluded: "We see significant potential in the sports nutrition market in the GCC and MENA region. The GCC market is expected to grow at over 20% per annum over the next five years outpacing the global markets. We are excited to further expand our portfolio of technology-driven businesses. We look forward to working with Sporter.com to capitalise on the market potential, to enter new markets and to establish the company as the leading player in the online retail of sports nutrition in the region".

Ernst & Young acted as financial and tax advisor, while Gibson, Dunn & Crutcher acted as legal advisors to Gulf Capital on the transaction. Capital Bank Corporate Advisory (DIFC) Ltd. acted as financial advisors and Eversheds LLP acted as legal advisors to the sellers.
Gulf Capital becomes one of largest investors in the digital economy in GCC, injecting over half a billion dirhams in regional internet and Ecommerce companies.

Gulf Capital, one of the largest and most active alternative investment firms in the Middle East, today announced that it has deployed over half a billion dirhams (over AED 500 million) to date in technology and ecommerce investments across the GCC, making it one of the largest technology investors in the region. The Firm has invested in the leading regional online B2B hospitality platform, the largest Middle Eastern auction platform and the leading online sport-based products and supplements marketplace.

Addressing more than 6,000 delegates at Step Conference, the leading technology platform that connects tech startups and mid-sized companies with investors, Dr Karim El Solh, Chief Executive Officer of Gulf Capital, says: "The technology scene is rapidly evolving in the GCC, and we are seeing the rise of a number of regional players that are becoming market leaders on both the regional and global fronts. Gulf Capital is actively backing and investing in these market leaders and helping them graduate to the next level. We expect a number of success stories to emanate from the region, many represented here at this year's Step Conference. We forecast a substantial increase in technology investments in the GCC and significant returns to be generated for the early backers of these technology companies."

Gulf Capital's first technology investment was in Destination of the World which has become one of the largest online accommodation wholesalers in the world, with footprints extending from North America to Asia Pacific. Gulf Capital has also invested in two e-commerce platforms, namely Sporter.com, the leading sport-based products and supplements marketplace and Emirates Auction, the largest auction site in the Middle East.

"The digital economy is having a transformational impact on our lives and economies, and ecommerce is at the heart of it. It is perhaps the top mega trend that will have a profound impact on every business in the GCC in the coming years. The region has historically been famous for its commerce traditions, linking East and West through the silk and spice trade routes. We are fortunate to have commerce in our DNA and today, with one the highest adoption rates of mobile and internet technology in the world, the GCC region is set to witness an explosion in ecommerce activities. This trend will undoubtedly generate attractive investment opportunities for regional and global investors."

According to Boston Consulting Group (BCG) the digital economy, which contributed US$2.3 trillion to GDP in the G-20 in 2010 and is estimated at more than US$4 trillion in 2016, is growing at 10% a year; significantly faster than the global economy as a whole. The growth in the digital economy is even higher in emerging markets: 15% to 25% per year. B2C ecommerce, in particular, is growing at higher rates in MENA and other emerging markets, compared to more mature ones. In MENA, B2C ecommerce grew at 20% in 2015, compared to 11% in the UK, 12% in Germany, 7.7% in France, 33.3% in China, 22% in Brazil and 12.5% in North America.

"Regional ecommerce is still small when compared to world averages, but this is set to change," Dr Karim El Solh adds. "Recent transactions like Amazon buying the leading regional online marketplace Souq.com demonstrate the huge potential global players see in this market. At the moment, the share of ecommerce in the GDP of the Middle East and North Africa region is at the bottom of the world list, with the eGDP representing 0.71%, against a global average of 3.11%, according to a research conducted by Ecommerce Foundation. So, however you look at it, the regional growth potential is huge," reasons Dr Karim El Solh.

The UAE, Saudi Arabia, Egypt, Jordan and Lebanon remain the leading regional hubs for tech startups and hence are attracting significant early stage and private equity investments. "Growth capital investors are closely looking at local technology firms which can disrupt industries, scale up and become leading regional and global players. Given that it is still early days, the prospects for regional ecommerce and technology companies are very promising."

STEP Conference is the largest tech startup event in MENA. Global and regional leaders and industry experts will be taking the stage at Dubai International Marine Club (DIMC) from April 5 to 7 to tackle the latest trending topics in technology, digital and entertainment industries. Delegates will be discussing all facets of the entrepreneurial ecosystem; from operations to technologies and investments. (c) company release

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