Abraaj Capital, the Middle East and North Africa’s biggest buyout firm by assets under management, has signalled its confidence in the North African market by acquiring local private equity group Amundi's North African private equity operation.
The deal comes one month after it failed in its attempt to acquire a stake in Cairo-listed buyout firm Citadel Capital. Talks between Abraaj and Citadel reportedly broke down after the two firms failed to agree a framework, terms and mechanics for a proposed deal.
This investment demonstrates our commitment to unlocking the economic potential of the Maghreb
Tom Speechley, Abraaj Capital
Dubai-based Abraaj has instead agreed to acquire the operation from Amundi from its parents, French banks Société Général and Crédit Agricole, according to a statement.
Under the terms of the deal, Abraaj will take over the management of Amundi’s $161 million SGAM Al Kantara Fund, and Amundi’s stake in that vehicle.
Abraaj will also assimilate Amundi’s 11-strong team, which it said would “significantly enhance its presence in North Africa”. Included in the deal are two offices, in Morocco and Tunisia, and their staff. A third office, in Algeria, is being developed.
The Kantara Fund, a buyout and expansion capital-focused vehicle, has five existing investments in Morocco and Tunisia, and is pursuing a pipeline of small to mid-cap investments in the region.
It is not the first time Abraaj has sought to diversify through acquisition however. Two years ago, it bought Amman-headquartered venture and growth capital firm Riyada Ventures, which it has since turned into its SME-focused Riyada Enterprise Development (RED) subsidiary.
Tom Speechley, a senior partner at Abraaj and chief executive of RED, said: “This investment demonstrates our commitment to unlocking the economic potential of the Maghreb – a rapidly emerging growth region with favourable demographics and significant long-term economic development opportunities.
“We believe the SME segment offers among the best investment opportunities in the MENA region today as well as providing the greatest opportunity for job creation, economic growth and diversification. During this transitional period in North Africa, we believe it is critically important to encourage SMEs as they serve as the key drivers of the region’s new economic growth,” he added.