Investcorp consortium picks up Saudi jeweller
A consortium led by Bahrain and London-listed Investcorp paid more than $200m (€148m) to acquire a 70% stake in Saudi jewelry firm L'azurde at a time of difficult market conditions, a top Investcorp executive said Thursday.
"The enterprise value of L'azurde is in excess of $300m. We bought 70% of the company," Azmat Taufique, co-head of Investcorp's Gulf growth capital business, told Zawya Dow Jones in a phone interview.
Investcorp, along with National Commercial Bank's Eastgate Capital Group and Abu Dhabi-based investment banking firm The National Investor, closed the deal this week after rounds of negotiations with the owners of the company.
"Given the turmoil of the market place, asset valuations kept revalued downwards," Taufique said. "The challenge was to do the right deal at the right price."
The Investcorp-led consortium will be the majority shareholder in L'azurde and will help institutionalize the company, expand its markets and build its brand across the Middle East and North Africa, and internationally, the company said separately in a statement today.
"Investcorp has a 72% stake in the consortium, with around 20% for Eastgate and 8% for TNI," Taufique said. The founder of L'azurde, Abdul Aziz Al Othaim, will retain a 30% stake in the company. He will also continue as chief executive and chairman of the company, according to the statement.
Credit Suisse Middle East Investment Banking advised Al Othaim on the transaction.
L'azurde, which has manufacturing facilities in Riyadh and Cairo, made more than $500m in revenues last year and grew Ebitda by 14% over the same period. The deal is Investcorp's second investment through its Gulf Opportunity Fund I. In November, the fund closed its first deal, the acquisition of IT and telecom products distributor and services provider in the Middle East and Africa, Redington Gulf.
Investcorp, which last year raised $1.1bn for the Gulf Opportunity Fund I, has in excess of $800m in cash ready to be deployed, Taufique said.
The investment firm deals in private equity, hedge funds, real estate, technology investment and Gulf growth capital.
The successful closure of the L'azurde private equity transaction gives some hope to an industry that has suffered from shrinking funds, a scarcity of deals, few completed exits, minimal debt available and job losses across the industry.
According to Taufique, Investcorp has a strong pipeline of deals and is seriously looking at a number of transactions. He declined to give further details.
"It is not easy to buy a business even if valuations are going down," he said, adding that the company's "focus is to build partnerships" to work "on other transactions."
--By Mirna Sleiman
Zawya and Private Equity News are both owned by Dow Jones. Contact the author on Mirna.Sleiman@dowjones.com
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