Dubai, United Arab Emirates Oct 14, 2008: Growthgate Capital Corporation, the GCC-based specialist buyout firm, announced that it has reached a final agreement to acquire 33.33% of Averda International Ltd., an integrated waste management concern with solid waste operations concentrated in the Middle East and North Africa. Averda, a privately-held company, which is majority owned by its founders-managers, services more than 2 million people located in some 500 communities, and has consolidated annual revenues of circa $100 million and expected net profits margin in excess of 15% for the fiscal year 2008. The value of the transaction was not disclosed.
Growthgate, the GCC-based specialist buyout firm, has announced the completion of a $100 million private placement of shares as part of its capital raising program for the current year. The funds were contributed in full by the existing shareholders of Growthgate and will be allocated to a series of earmarked investments in portfolio companies that are principally located in the GCC as well as other select markets of the wider MENA region. Growthgate was established in 2007, with an authorized capital of $500 million. The results of fiscal year 2007 and this more recent capital injection will bring the total shareholders’ equity of Growthgate in excess of $250 million by current year-end.
Growthgate is a private investment firm that follows a ‘buy and build’ model by partnering with management to build emerging growth businesses into enduring organizations. As Growthgate is structured as a holding company and not a fund, it has the flexibility to take a long-term approach and decide on follow-up investments and on exits without the pressure of ‘fund pre-determined’ deadlines. To date Growthgate’s portfolio companies that are located in the GCC include: Able Logistics Group (logistics & transport), Gama Aviation Holding (private jet business) and Roots Group (wholesaling and manufacturing of building materials). Growthgate is managed by Keystone Equity Partners WLL.
May 11 2008, Dubai, United Arab Emirates – Growthgate acquires part of Roots Group (Saudi): Growthgate, the GCC-based specialist buyout firm, has announced that it has reached a final agreement to acquire 20% of Arabian Roots Group, a Saudi based building materials conglomerate, and will separately acquire additional equity interests in this conglomerate’s Retail Division. Arabian Roots is a privately held Saudi corporation with sales of circa SAR 700 million and expected profits of SAR 37 million for the fiscal year 2008. The value of the transaction was not disclosed.
Arabian Roots is a leading wholesaler, manufacturer, retailer and special service provider in the Saudi market, focusing on building materials including, among other things, metal works, fences, doors, railings, grids, false ceiling supports, adhesives, paints, coatings, waterproofing membranes, power tools, electric generators, and mobile cranes. Arabian Roots has a well-developed regional distribution and marketing network and outlets that cover the GCC (Saudi, UAE and more recently Qatar), the MENA region (with Egypt, Syria and Lebanon), and a presence in Malaysia.
Arabian Roots was founded in 1981 and restructured around the wholesale, manufacturing, contracting and retail divisions by the new management starting in 2004 under the leadership of Mr. Ousama Fansa its CEO. The shareholders’ base comprises prominent Saudi businessmen with deep-rooted experience and extensive holdings in the construction sector throughout the Middle East.
“Growthgate and Arabian Roots are committed, in the near future, to expand the footprint of Arabian Roots throughout the MENA region with an emphasis on the GCC and other key markets and to broaden the business holdings and the products mix essentially via acquisitions of enterprises that are engaged in the building materials sector, provided that they add strategic depth and economic benefits to Arabian Roots”, said Ousam Fansa, the company’s CEO. “The construction boom witnessed in the GCC markets and which is fuelled by the needs for renewed infrastructure, expanding urban centres and newly planned industrial and economic zones will create a sustainable level of demand for building materials for years to come and Arabian Roots is at the heart of such activity with a pole position that is only shared by few other players” added Mr. Fansa.
Growthgate follows a ‘buy and build’ model that focuses on acquiring medium-sized, successful companies with strong management and turning them into regional champions through a series of carefully selected and well-priced acquisitions. Investments are held for 3 to 5 years prior to being monetized via an exit sale. This deal is the third direct equity investment of Growthgate since its capitalization in mid 2007, coming after Able Logistics (logistics & transport) and Gama Aviation (private jet business) and marks the first private equity transaction for Growthgate in the prized Saudi market.
As per Saudi regulations that govern foreign direct investments in the Kingdom, this transaction is subject to the approval of the Saudi Arabia General Investment Authority.
Growthgate Capital Corporation, the GCC-based specialist buyout firm, has announced that it has reached a final agreement to acquire part of Arabian Roots Group, a Saudi based building materials conglomerate, and will separately acquire additional equity interests in this conglomerate’s Retail Division. Arabian Roots is a privately held Saudi corporation with sales of circa SAR 700 million and expected profits of SAR 37 million for the fiscal year 2008. The value of the transaction was not disclosed.
Gama Holding Ltd, owner of several business aviation companies in Europe including Gama Aviation Ltd is eying the region for expansion.
Growthgate, the GCC-based specialist buyout firm, has announced that a Consortium led by it and which comprises Crescent Investment LLC and few other strategic investors, has reached a final agreement to acquire 33.33% of Gama Holdings Ltd and will control 51% of the capital stock of Gama Middle East and North Africa, under formation. Gama is a privately held corporation with EBITDA of circa $10 million for the reporting period of 2007/2008. The value of the acquisition was not disclosed.
Gama Holdings Ltd owns a number of leading business aviation companies in Europe, including Gama was founded in 1983 by Marwan Khalek and Stephen Wright and operates principally out of Farnborough Airport in the UK with private jet services covering destinations in the US, EU, Eastern Europe, Asia and the Middle East. The business activities of Gama comprise private jet ownership, charter services, business jet management, medical transport operations and aircraft maintenance.
“The new investment partners and Gama are committed, in the near future, to develop the MENA entity in order to cover all key destinations in the region and engage in Fixed Based Operations using Sharjah Airport as the principal regional hub as well as working to secure AOCs in the UAE, Qatar, Bahrain and Saudi.” Said Marwan Khalek, Gama’s founder and CEO “The company also intends to further expand in Europe using a base in Germany to support our work in the Russian market and will capitalise on our awaited FAA Part 135 licence to further increase our North American business. Finally, the company will seek further acquisitions in the Near East (India) and Asian (China) emerging markets”
Gama manages 32 aircraft, of which 7 are expected to be added to the fleet between January to June 2008 (2 in the US and the balance in the UK). The types of aircraft owned, operated and managed by Gama include a wide range of Eurocopter, Sikorsky, Learjet, Hawker, Challenger, Gulfstream and Boeing products.
Growthgate follows a ‘buy and build’ model that focuses on acquiring successful companies with strong management teams and turning them into regional champions through a series of carefully selected and well priced acquisitions, prior to monetizing the investments via an exit sale. This deal marks the second direct equity investment of Growthgate since its capitalization in May 2007.
In June 2007, Growthgate acquired 49% of E-Freight, a UAE-based logistics and transport company with growing regional operations in the Middle East and Africa. Growthgate was established by a select group of institutional and individual investors from the Middle East comprising national banks, pension funds, trading groups and prominent merchant families from the region.
Growthgate the newly established Bahrain-incorporated buyout firm, has announced the execution of a final sale and purchase agreement to acquire 49% of the capital stock of E-Freight International, a leading logistics, warehousing and freight forwarding company based in the UAE. E-Freight’s estimated profits in 2007 were at AED 13 million. The company has operations in Sharjah, Jebel-Ali and the Dubai Free Zone in additional to special logistics support and freight services in Afghanistan.
E-Freight was founded in 2002 by a group of senior executives from the freight and logistics industry and has developed into one of the leading air transport and freight forwarders in the Middle East. E-Freight is on an unparalleled growth path that has seen its revenues soar from AED 85 million in 2005 to AED 194 million in 2006 while realizing significant net margins. E-Freight’s management is set to develop the company into a fully-integrated logistics and transport outfit to capitalize on the massive opportunities in global trade and transshipment of goods between the key markets of Asia and Europe via the Gulf. For that, it is embarking on an aggressive strategy to acquire freight, express courier and logistics companies throughout the Gulf, Asia, the Near East and Africa. E-Freight plans, within the coming 2 to 3 years, to have completed its ambitious expansion plan that would see its footprint reach no less than 50 markets with operations spanning from warehousing management, to freight forwarding, express courier, postal and remittances services. Growthgate, a specialized buyout firm with a ‘roll-up’ private equity model, focuses on acquiring local, successful businesses that are principally located in the GCC and turning them into regional champions through a series of selected acquisitions, well-timed acquisitions in specific, growth orientated sectors.
Growthgate was formed in late 2006, by a team of veteran Arab investment bankers and corporate financiers with extensive experience in both the geographies earmarked by Growthgate and the sectors it intends to invest into. Growthgate shareholders include prominent institutional and individual investors from the Gulf States and the wider Middle East region. The investment by Growthgate in E-Freight will be in the form of a capital increase to secure the company with growth capital and expansion finance. The value of the deal was not disclosed. Both Growthgate and E-Freight are privately held companies.