Dubai's Abraaj Capital To Acquire Uk-Based Aureos

Dubai’s Abraaj Capital To Acquire Uk-Based Aureos

Capital, the Dubai-based private equity firm which announced plans on Monday to acquire Aureos Capital, said it did not raise debt to fund the transaction.

February 20, 2012 1:31 by Reuters

“We’re using Abraaj’s balance sheet for this deal,” Mustafa Abdel-Wadood, Abraaj’s chief executive, told reporters after announcing the deal. The company did not give financial details.
Abraaj expects the acquisition of the emerging market private equity fund, which is based in the United Kingdom and has about $1.3 billion assets under management, to close during this quarter.
Abraaj Capital said on Monday it will acquire specialist fund Aureos Capital, in the latest bid by the Middle East’s largest private equity firm to expand its geographical footprint.
Abraaj declined to give financial details for the acquisition but said the combined company will manage $7.5 billion in assets across 30 emerging countries.
Aureos Capital Limited, based in the United Kingdom and with about $1.3 billion assets under management, provides expansion and buy-out capital to small and medium-sized businesses across Asia, Africa and Latin America.
“We are putting together two complementary platforms. Both firms are on the ground. In the case of Aureos, they have been investing in (small and medium enterprises) for over 10 years,” Mustafa Abdel-Wadood, Abraaj’s chief executive officer, said at a news conference.
“The deal is expected to close this quarter.”
Aureos is active in more than 50 emerging markets and manages 17 regional private equity funds, including its South Asia Fund.
Abraaj has recently been keen to beef up its emerging market presence. Last August, it bought the North African private equity operations of French asset manager Amundi.
The Dubai-based firm also looked at a potential acquisition of its Egyptian rival Citadel Capital but the talks ended without a deal.
“This (Aureous deal) is a very deliberate path of going for emerging markets exposure. Part of that path is building the expertise and the infrastructure to gain exposure to these markets,” Abdel-Wadood added.
In December, Abraaj exited its stake in Turkish hospital group Acibadem in a deal which group Chief Executive Arif Naqvi said resulted in a “significant profit” for the company.

The PE firm, which said it plans to sell up to four of its investments in the next 18 months, sold its stake in the Turkish firm to Integrated Healthcare Holdings (IHH), a healthcare unit of Malaysia’s Khazanah Nasional. The deal valued Acibadem at around $1.68 billion. [ID: nL6E7NN1D0]
The Middle East and North Africa regions are important investment areas for private equity firms, which have raised $22.7 billion to invest into the area in the past five years, according to figures from London-based research firm Preqin.
Deal activity in the region is showing signs of rebound after a period of slowdown following the global financial crisis.
By Mirna Sleiman and Dinesh Nair