The private equity arm of Egyptian investment bank EFG-Hermes has sold its 19 per cent stake in jeweller Damas International to Qatar's Mannai Corp for US$150 million, the company said yesterday.
The deal, one of the few exits concluded in the Middle East in recent months, signalled a possible revival of the region’s private equity industry, which has been grappling with regional political turmoil and investor unease about the global economy.
The Qatari conglomerate will now hold 100 per cent ownership of the jeweller.
“This is a tremendous success, given that we bought the stake for $85m in less that two years,” said Karim Moussa, the head of private equity at EFG-Hermes.
“The market has been suffering from lack of exit routes, but we will see more private equity sales going forward, either through initial public offerings or strategic acquisitions.”
Mannai and EFG-Hermes took control of the jeweller in 2012, with Mannai holding 66 per cent of Damas and the Egyptian company 19 per cent.
EFG-Hermes, one of the largest investment banks in the Middle East, had in May 2012 teamed with Mannai, whose operations span the oil and gas, automotive, travel and logistics sectors, and de-listed the jeweller from Nasdaq Dubai after acquiring it for $445m.
“We will have a busy year ahead of us, especially with our new investment strategy. We see opportunities across Mena and we’re increasingly looking at Egypt and Africa,” Mr Moussa said. Consumer-oriented sectors, health care and infrastructure are the most attractive for private equity investors, he said.
The region, home to such private equity players as the United Arab Emirates’ Abraaj Capital, the region’s largest local firm, Bahrain’s Investcorp, and Egypt’s Citadel Capital, has been sitting on billions of dollars collected in previous years by regional funds without being deployed.
EFG Hermes’ Investment Banking division acted as financial advisor and Freshfields was the legal advisor to the private equity division on the Damas exit.
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