Growthgate Capital, the Gulf-based investment firm announced today that it has exited from its investment in Able Logistics Group (Able) by selling its 70 percent equity stake therein to Kerry Freight Services (South Asia) Pte. Ltd., a wholly owned subsidiary of Kerry Logistics Network, for $32 million (subject to certain adjustments). Taking into account this transaction and prior dividends received, Growthgate Capital has realized a 3x returns on its investment in Able. The preparations for Able’s IPO which were announced in Q1 2014, were set aside indefinitely in favor of Kerry’s strategic buyout offer.
Able is a leading freight forwarder and logistics provider headquartered in Dubai, with additional operating bases in the Middle East and other key hubs in the Near and Far East. The transaction involved the acquisition of 70 percent of Able’s capital stock by Kerry Freight Services (South Asia). Kerry Logistics Network, the owner of Kerry Freight Services, is a publicly listed company in Hong Kong (stock code 00636) with a total market cap of HK$20.5 billion as at December 29, 2014. Kerry is one of Asia’s major logistics providers with a global network that stretches across six continents, including an extensive distribution network and hub operations in Greater China and the ASEAN region.
Growthgate first invested in Able in 2007, when operations were limited to the UAE and few Asian destinations. Today the company operates from multiple bases in Dubai, Sharjah, Oman, Saudi Arabia, Afghanistan, and Hong Kong, with over 500 corporate customers including multinationals in diversified sectors such as electronics, food, and fast moving consumer goods. Able’s management expects to achieve $135 million in total revenues in 2014.
“We have always believed in Able’s business model, and the outstanding team led by Dr. Ghanem Al Hajri, Executive Chairman and Vijay Vikram, CEO. Since 2007, we have been continuously impressed by their commitment to delivery and the phenomenal results achieved. This is a great development for Able, as Kerry is the best strategic partner to take the company forward and give the senior management team the opportunity to propel the business on a wider scale as part of a global platform,” commented Karim A. Souaid, General Manager of Growthgate Capital.
“Since its establishment in 2001, Able has delivered consistent and outstanding growth quarter after quarter. Starting from scratch, the company has gained a significant market share of the corporate logistics and freight forwarding market in little over ten years, in a highly competitive and concentrated context, and a difficult economic climate. This tremendous success is the result of the combination of an ambitious project with a faultless execution by a great management team. We have consistently supported and funded Able, and are proud of its achievements,” added Souaid.
Vijay Vikram, CEO and co-founder of Able said, “We have very much appreciated the steadfast support from Growthgate throughout the past years. As the only institutional investor in the company, Growthgate took the initial risk, and continued to support us ever since, committing valuable time, capital and efforts to build-up the platform in different markets and varying economic cycles. Growthgate has simply been an ideal growth partner.”
White & Case acted as international counsel for Growthgate Capital on the transaction whereby HLP LLC acted as local counsel. PwC further advised Growthgate on specific finance and accounting aspects of the transaction.
About Able Logistics
Able Logistics Group is an integrated provider of freight forwarding, land transportation, and warehousing services, and a regional leader in its business segment thanks to an extensive network than spans throughout the Middle East and Asia; and a management team with over 35 years of experience. Since its inception in 2001, Able has evolved from an airfreight forwarder into a logistics service provider using multi-modal solutions to address the growing needs of governmental agencies; airlines, multinationals and conglomerates operating in Asia, Europe, Africa and the Middle East.
About Growthgate Capital
Growthgate Capital is a Gulf-based private investment firm that follows a “buy-and-build” strategy. The firm specializes in buying into well-managed companies with scalable business models, and leveraging those capabilities by acquiring/adding more entities to build up and grow said companies. Targets are principally selected from the GCC and other key markets of the MENA region. Growthgate Capital was formed in 2007 with $200m in permanent capital subscribed by a select group of shareholders including State-owned banks, public pension funds, and single-family offices from the Middle East.
The firm has completed to date four liquidity events including the sale of its stake in Roots Steel International (Saudi Arabia) in 2013, a partial exit from Able via a dividend recap in Q1 2014, the reverse takeover by Gama Aviation with Hangar 8 Plc and its subsequent listing on the London Stock Exchange; and the current strategic sale of Able to Kerry Logistics Networks. Growthgate Capital had, as of beginning of 2013, circa $1.65 billion in Assets-under-Monitoring and is managed by Growthgate Partners.
Growthgate-backed Gama Aviation completes reverse merger and lists on AIM London Stock Exchange
The merger creates a circa £130M/$200M capitalized global leader
Manama – Bahrain. December 9, 2014. Growthgate Capital, the Gulf-based investment firm announced today that its portfolio company Gama Aviation has proposed a £82 million ($127 million) reverse takeover with Hangar 8 Plc, an international operator listed on the London Stock Exchange’s Alternative Investment Market (AIM). Subject to completion in early January 2015, the new business, Gama Aviation Plc (AIM: GMAA) will be listed with an anticipated market capitalization of £130million ($200 million).
Growthgate Capital will receive shares in the public entity, with both the CEO and Chairman of Gama Aviation retaining their positions. This transaction results in Growthgate Capital receiving shares in the combined listed entity and realizing superior returns over invested capital.
Growthgate Capital first invested in Gama Aviation in 2007, and was joined by partners Crescent Investments and a private investor’s group. Today, Gama Aviation is a global business aviation services organization, and with the merger the new combined entity will become a leading global player.
The deal brings together two complimentary businesses, with very little operational overlap, creating a combined business of the scale, breadth and depth required by progressive and growing market. On completion the offering will combine to:
Karim A. Souaid, General Manager of Growthgate Capital, stated, “A merger with Hangar 8 Plc provides a solid competitive advantage to Gama Aviation that will benefit from enhanced capabilities, and a diversified revenue stream that span across services and markets. This value-accretive business combination offers synergies and economies of scale, leading to further profitability. We have forged a unique partnership with the founders-managers of Gama Aviation, whose vision and perseverance ensured a steady and beneficial journey to all.”
Marwan Khalek, former CEO of Gama Aviation and now CEO of the combined public entity said, “Over the last 30 years, Gama Aviation has grown steadily to become one of the major business aviation service providers in the world. However, through this merger we will be creating a true global leader and one that is uniquely positioned for accelerated future growth”.
Karim Souaid introduces the 5th White paper published by Growthgate Capital and Harvard Business School that seeks to debunk some of the myths surrounding Private Equity, by reviewing how local and international Private Equity firms have been able to add considerable value to portfolio companies and the broader economy.
Link – http://ara.tv/695gb
Scores of Syrians waiting to register at the newly opened UN Refugee Agency registration centre in Khalda last Thursday experienced their first iris-scanning.
The Iris Recognition Technology was recently implemented to streamline the refugee registration process and to tackle the backlog of 60,000 Syrians awaiting registrations at the Anmar Hmoud Centre for Refugee Registration and the Irbid centre.
“The iris scan was introduced because we are dealing with over half-a-million people in various locations so we needed to prevent multiple registration,” said Nihad Hota, a UNHCR registration officer at the Khalda centre.
Developed by the Jordan-based IrisGuard company, the technology uses the iris instead of fingerprints to identify a person.
“The eye is a muscle with involuntary movements; it captures the light and works as a camera lens, and if the eye is dead, it can’t react anymore, so there is no chance of fraud,” Alaa Bilbeisi, IrisGuard technical support engineer, told The Jordan Times on Sunday.
Iris-scanning completes the traditional registration where biometric data such as names and addresses are recorded along with testimonies and lists of relatives.
“This way, we have a complete and proper data registration of each refugee. We are coming out of the emergency phase now so we are trying to collect more information,” Hota noted.
After they register, Syrian refugees are entitled to free education, healthcare and food in addition to financial assistance for the most vulnerable, which can be withdrawn using a bank card.
To avoid the risk of theft or of the pin code being forgotten, the iris identification allows refugees to withdraw their assistance from a Cairo Amman Bank ATM using only their eyes.
“It [ensures] that the person entitled to the assistance is the only one benefiting from it. Returnees could sell their card to someone staying in Jordan, it could be stolen… this way we are sure that the money is collected by the right person,” Hota said.
For the World Food Programme (WFP), which is in charge of providing food support to the refugees, the technology will be most beneficial when implemented in the Zaatari Refugee Camp as it ensures that the right number of refugees gets the assistance.
“Most of the time, we don’t face too much fraud, but with Ramadan and the additional food packages we received from Saudi Arabia, it attracted a lot of people back into the camp who double-registered,” WFP emergency coordinator Jonathan Campbell said over the phone on Sunday.
Before winter comes, the donations of material items and foodstuff increase, posing an accrued risk for double-registration and fraud, but by then, the system will have been implemented in Zaatari, according to Campbell.
Every month, WFP spends $29 per refugee in the Zaatari camp and $40 for those living in host communities, where retail prices are higher.
UNHCR Senior Protection Officer Susanne Butscher noted that the system will help save costs as it allows the identification of multiple registration cases “and the donors feel that the right person gets the assistance”.
IrisGuard confirmed that the Amman Cairo Bank and the UNHCR are the only entities with a database of Syrian refugees and that the information is not shared with any government or intelligence body.
So far, over 60,000 Syrian refugees have been registered through the technology in the Irbid registration centre and more 5,000 in the Khalda facility, according to the UN agency.
Iraqi refugees have also been entitled to withdraw their assistance through the system since last month, and 2,800 of them are already using it, according to IrisGuard personnel.